Ahh ok, so essentially if she assumes the remaining mortgage at $200,000 + $30k option fee, my tax obligation would be on $230,000 (not discussing capital gains work arounds...)?

Typically, when funds acquire loans, they assume delinquency/default risk in exchange for earning a yield on their investment.Yet this would work differently – it’s a request to purchase debt alongside a corresponding put option/insurance policy.From the buyer’s perspective, as long as the seller remains solvent, with sufficient liquidity for any exercised options, it’s a risk-free investment.

The structure we landed on was as follows:- Fixed Builder fee of $300k (each project varies but are 2-6 units, and 5,000-9,000 total finished sq ft)- Fixed Return on all my initial capital invested of 50% (plus return of 100% of initial capital)- Remaining Profit Split of 60/40 (60% to me, and 40% to him)I understand a lot of this hinges on how accurate the proforma is and how close we can get to actually hitting our development costs estimates, build cost estimates, and sales per sq. ft. estimates.

August 7th, two days before court the tenant reached out and wanted to pay July and remain in the unit. 

Property tax around 200/month and Insurance 130/month.Based on a Heloc at 182,000 when all is done my plan would be to do a cash out refi to pay this down/off and use remaining cash flow + W2 income to pay the rest off.

Or should we accept the potential loss on the second room if it remains unrented?

Build outside of that and your market goes down to the remaining 5%.

Leaving it on the remaining lot is not an option as it is being converted to commercial.

Remaining balance is $168k.

Plenty of fixer uppers remain and the commercial properties have just begun to revitalize.