We have been raising private money for a while and have done so mostly with sophisticated (and some accredited) investors.

The wealthy are obviously much more mobile and much more sophisticated when it comes to protecting their wealth- their Property.

The former owner would be both a tenant, who could be evicted for not paying rent, and a mortgage holder who receives payments from you and could foreclose if you don't make the payments.I probably wouldn't want to do a deal like that because it would be messy to evict them if necessary - I can only imagine trying to explain it to a judge without coming off like a sophisticated real estate investor taking advantage of a civilian.That's not to say it wouldn't work, it's just harder for me to wrap my head around.

I’d run a Discount Cash Flow analysis on it.You may be able to find unsophisticated owners who will agree to it w/o running that analysis, but more sophisticated investors will also then look at the opportunity cost of capital and ask themselves if they sold at market rate and invested the difference between the discounted price you’re offering and the fair market value, could they make more money on their own investing the difference, than you’re offering them.So to summarize: 1.

The best place to build this reputation (in my opinion) is in the 20-50 unit range. 20 is just big enough to give you credibility and just outside of the range of most individual investors; 50 is small enough that the big operators don't want it so you'll have less "sophisticated" competition.

Here, he would be entitled to his interest (and points if he’s sophisticated enough to require them) and you would keep the remaining profits.Only about 1347 variations on this, but those are the basics of an equity interest and a debt interest in a flip.

That is a strategy that must be employed with a great plan in order to forecast a greater outcome than investing through your retirement account; however, I will say that borrowing from your 401(k) to reinvest does seem like a prudent strategy for a sophisticated investor.   

Long-term hold LOs and SLOs principals stay in natural persons name, acting above board, sans 'sophistication'.Lender's and title don't like anonymity, what they don't understand or lots of moving parts plain and simple. 

I also have a couple of sophisticated clients that have proprietary data sources.

Sophisticated investors invest on cashflow where the rents exceed the mortgage plus expenses (and enough money to pay for professional property manage to do our dirty work).Sophisticated investors look at the Rent-to-Value Ratio and look for at least 1% or more to be able to cashflow after expenses.