Beside investing their own cash on the same terms, the sponsors return should be heavily weighted toward “carry” (receiving the bulk of their return as sponsor in the form of an interest in the property rather than cash) with that carry subordinate to the investors receiving their investment returns PLUS a minimum annualized return.

We've had one cabin that has failed to pay a single assessment since the inception of the HOA one year ago and has wracked up $1750 in late fees. 

I only have one that seemed to fail to launch.What I do get more is I offer to run a newbie through a transaction and/or show them the work in progress and I get either no show or barely show. 

Now if you could prove they were purposely steering qualified candidates to other units, or failing to market the unit at all, those would possibly be acts of fraud or gross negligence, which can be litigated. 

Too many new syndicators think they can get away with skipping legal requirements—but the SEC isn’t playing around.If you’re raising capital, DO IT RIGHT:✅ Use a PPM & Subscription Agreement to protect yourself and your investors✅ Avoid general solicitation (unless using a verified 506(c) offering)✅ Understand accredited vs. non-accredited investor rules✅ File your Form D and comply with state laws🚨 Failing to follow these regulations could mean SEC fines, investor lawsuits, or worse.

If you fail to follow the rules, you may open your personal assets to a lawsuit.

The sale failed and he still owns it.One of the potential solutions is to use an SBA 504 loan for the real estate. 

Less RiskWith traditional rentals, if your one tenant fails to pay, you’re in trouble.

OR you are paying for it with a failed promise. 

At this point, they are doing most likely what others here didn't think was possible, and probably something they failed at.