This rental property will be designed with a keen focus on generating a healthy cash flow.Project Blueprint:Budget: Allocated at $200,000, covering construction and all related expenses.Focus: To merge energy efficiency, durability, and tenant comfort with cost-effective construction strategies, making the rentals both affordable and sustainable.Location: Currently scouting – I'm open to suggestions and insights on ideal locations supporting this vision.Strategic Planning:Efficient Design & Planning: I'm considering compact, multi-functional layouts to optimize space usage and incorporate cost-saving construction methods without compromising quality.Sustainability & Efficiency: The plan includes investing in top-notch insulation, air sealing, energy-efficient systems, and sustainable materials to reduce the building's carbon footprint and operational costs.Budget Management & Cost-Saving Initiatives: Careful budgeting and exploring value engineering options are crucial, alongside seeking out grants or incentives for energy-efficient building projects.Community & Sustainability Goals: To create shared amenities to foster a community feel and implement systems encouraging tenants to monitor and reduce their energy consumption.Seeking Community Insights on:Cost-Effective Building Strategies: How can I ensure the project remains within budget while achieving high sustainability and efficiency standards?

Is it simply that the amount of capital each LP invests is proportional to the overall equity split? 

My background is custom residential, everything from large single family residences to more compact 2-4 unit projects. 50/50 mix between end-user projects and spec homes.

People who invest and also add sweat equity would be partners proportional to their monetary contribution and get paid for the work they do separately.

. §1.1223-3(c)(2)(ii):If a partner has a divided holding period in a partnership interest, and paragraph (c)(2)(i) of this section does not apply, then the holding period of the transferred interest shall be divided between long-term and short-term capital gain or loss in the same proportions as the long-term and short-term capital gain or loss that the transferor partner would realize if the entire interest in the partnership were transferred in a fully taxable transaction immediately before the actual transfer.Essentially, the gain treatment would be prorated between ST and LT.

The "promote" is a share in profits above and beyond the sponsor's proportional share of investment.

Some lenders will lend as low as $50K but again, the fees % in proportion to the loan amount will be high.

4-If in Q#1 the S/U increases by $15k, then our Cash on Cash Return ("CCR") would decrease proportionally due to having a larger denominator.

With fill dirt and compacting and inspections, it's at least $10k......!

You can buy multiple houses instead of one, and although the rents are not as high they are higher than you would proportionally expect.