Let's say as an example I propose $205,000 purchase with 5k down and 5% interest with a 7 year balloon.

Which "Tier 2" neighborhoods would you propose are most likely to appreciate.

I have proposed to buy his house also, since he is relocating.

I understand that a signed lease is one method but you cannot even use rent deposits as they are being made to a business account that, on paper, has nothing to do with the proposed new loan.

You never know if they're going to blow it off or make a proposal right away.

I have also seen some crazy schemes proposed recently using trusts and lending that I will steer well clear of as well.Bottom line, options are still a great way to earn an excellent return because of the leverage aspect, but it had better be legit.

I would propose either an LLC or Series LLC depending on the volume of assets you are holding at any given point. 3.

You should have your legal and/or tax advisors review the proposed transaction to determine what the risks to you might be and then decide whether to move forward. 

@Colleen F.I completely agree with you and have proposed to him that running new lines is easier, and probably cheaper.

I would even propose making the rent higher and giving him money for each thing he completes.