One - from the Investment company act for the overall fund structure. 3(c)(5) is an exemption from the investment company act for real estate funds.Two - from the securities act for the investments within that fund structure. 506(b) and 506(c) are exemptions under the securities act, which allow different methods for marketing the funds/syndications.More detailed breakdown:🔹 3(c)(5) — The Real Estate Fund ExemptionThis is part of Regulation D under the Investment Company Act of 1940.

Electrical: Another important consideration is the electrical and plumbing systems.

Material prices have continued to rise, particularly mechanical/plumbing supplies, but it's been gradual and no changes within reasonable rehab life cycles that are truly profitability altering.

If you use subcontractors that cover multiple trades, like roofers can do gutters also, or HVAC guys sometimes also do plumbing, then they a lot of times agree to reduce costs in order to get awarded the work for both trades. 

Involves electrical, HVAC, plumbing, or mechanical repairs not expressly authorized.d.

If any major systems (roofs, plumbing, HVAC) are due, you may want to pad that line item slightly. 

Too many "wing it" with online forms and being completely unaware of local regulations and the transaction process in various states.

You should have some good economic reason for converting it.There is no court case or regulations specifically prohibiting this, nor telling taxpayers they can do this, from my experience, but again, you asking this question and it feeling a little "too good to be true" is usually a sign the IRS may scrutinize something like this, especially if done repeatedly. 

Look at the age and condition of the roof, HVAC, plumbing, electrical, water heater, windows, and major appliances.

I don’t want to be guessing two years later whether that $8,900 plumbing bill was a repair or a replacement.5.