(Promissory notes or corporate bonds) Issuing debt gives your investors a 1099, because those payouts create a tax event.

This is better in some ways, as I have the backups in the event of an audit and don't have to rely on my software vendor to still exist in 7 years. 

These meetups often have tax professionals in attendance.

Chris, when you say 95% of brokers are eliminated for not being able to provide successful transaction references, are you referring to actual mortgage brokers, or are you referring to the people that attend a “cash flow” seminar and believe  the easy money hype? 

I am no expert (hence posting here) but the bit that I have read seems to indicate that if the business is located in CA and operating in CA (as is the case since the property is in CA), the business is likely to fall under CA laws in the event of an issue. 

You can meet local investors by registering to attend real estate events in your area: https://www.biggerpockets.com/forums/521-events-and-happenings6.

You can meet local investors by registering to attend real estate events in your area: https://www.biggerpockets.com/forums/521-events-and-happenings6.

Operating Cash Waterfall looks as follows:1) Dad gets 10% pref on his unreturned capital ($4m * 10%) = $400k2) Dad / You / Sis split the next profits 20 / 40 / 40 - $80k / $160k / $160kCash Waterfall on a capital event (cash out refi or sale) as follows - lets say it sells for $5m in a few years1) First dad is paid back on his unreturned capital + any unpaid preferred returns - $4m2) Then balance is split Dad / You / Sis   20/40/40 - $200k / $400k / $400kYou could do management fees for additional involvement, fees upon a sale, etc - can go wild. 

I like your idea of getting involved in my local REIA and was also thinking of some Meetup.com groups here in Vegas I could attend.  

I'm planning to attend the next meetup with a friend and agent at The Rhu. looking forward to meeting.