One clarification...in the City of SD your attached ADU is no longer limited to 50% of the main unit.

I occasionally would get extremely motivated about investing in real estate, but would often be shot down by others or my own limiting thoughts.

What limitations are there for encumbering a property that has high equity, prior to a sale, in order to lower the tax basis as much as possible?

@Rohit SharmaWhen I got my loan a few months ago I had a restriction that limited me to leasing the property for more than 30 days to a renter.  

@Anthony Thompson We are looking to rent out by the room for college rentals (we are down the road from Roger Williams), and Bristol actually doesn't have any limitations on renting by the room, so technically it will all be one unit with two kitchens and two bathrooms.

It is typically not legal for someone to let a house go for unpaid taxes and then buy it back to wipe out a mortgage etc.You need to talk to an attorney you have limited time to get this reversed.

I'm not a fan of cameras unless they are limited to common areas, fully disclosed to all renters, and always maintained to ensure function.

Thanks for replies.Zoning is RT-4, as far as I can tell the only height limitation is 38ft for single family home.

I’d love to get some insight on the process and the limitations.

Since you have a W2, are you considered a passive investor and limited by the amount you can deduct?