I'd love to get your feedback on which option you think is more attractive and why.Option 1: Equity Partnership- Target Properties: Single-family homes, multifamily properties, and land for development in prime locations.- Investment Term: 5 years - 10 years- Equity Split: Investor 80% / Sponsor 20%.- Preferred Return: 8% annually to the investor.- Profit Sharing: After the preferred return, profits are split 70% to the investor and 30% to the sponsor.- Management Fees: 2% of gross rental income annually.- Acquisition Fee: 2% of the purchase price.- Disposition Fee: 1% of the sale price.Option 2: Debt Financing with Equity Upside- Target Properties: Single-family homes, multifamily properties, and land for development in prime locations.- Interest Rate: 6% interest only for a term of 5 to 10 years- Prepayment Penalty: 2% if the loan is paid within the first 3 years- Equity Upside: Investor receives 30% equity of the appreciationWhich option do you think is more attractive and why?

The less attractive view and smaller units get very close to your example numbers and sell all the time.

For one, they'll attract better quality tenants, which makes vacancies, tenant turns, servicing your debt a lot more likely and less variance to when you go to lower or middle class tenants.

This means attracting businesses that provide jobs within the city and creating more shopping options.

With effective management, properties in the right neighborhoods can yield handsome returns, potentially meeting or often exceeding your 7-8% net target.Regarding the most attractive area:Each neighborhood you've mentioned offers unique benefits:Miami Beach: A world-renowned destination with high demand from tourists year-round.

I would also have thought they would have attracted only the most conservative investor whose primary goal was protection of principal not how do I get the highest IRR ..  

Is there a specific town or suburb that would attract medical professional and/or professional tenants more than others?

These options allow them to control expenses better, attract similar tenants, and often achieve higher rents with lower costs.I believe there is a promising market for purpose-built attached single-family homes for rent in Worcester.

Judgments against an LLC with the property that is secured by a mortgage of 80% or more are not likely to attract ambulance chasers.  

This attracts higher quality, mid to long-term tenants who often take better care of their living space.#3 Higher Rent Potential:ADUs offer an additional income stream, allowing investors to charge higher rents overall.