Since agency loans don't allow you to put the loan in an LLC, ask your wife this. 

Focus on areas with strong rental demand, strategic rehab projects, and financing options that allow you to scale your investments.

The material participation has nothing to do with it being non-passive; it's the requirement allowing losses if an activity is non-passive.

This method allows each partner to defer capital gains tax on their portion of the property.It's important to perform the "drop" (distribution of property to partners) well in advance of the "swap" (sale or exchange) to comply with the "held for investment" rule.

Our primary goal is to retain as much equity in our properties as possible while leveraging outside capital to scale faster.Proposed Investment Structure:Investors contribute 30% of the purchase price and 30% of furnishing/rehab costs.Our LLC secures a new purchase loan in its name only, taking on 100% of the debt.This structure allows us to maintain 70% ownership of the property.Properties will be actively managed to maximize returns, likely achieving higher upside than long-term rentals.Proposed Compensation for Investors:6% preferred return annually.After the preferred return is met, profits are split 75/25 (with investors receiving 75% of profits on their portion of ownership).Profit Calculation:Revenue – Operating ExpensesExcludes mortgage principal & interest, as our LLC assumes full responsibility for the loan.Looking for Feedback:Is this structure fair and attractive to investors while ensuring long-term alignment?

One good thing about building a 2-4 unit as a primary is you less money down and you can use the other units as income to help build a more expensive home.FHA allows for a higher loan amount as you get into the 2, 3 and 4 unit homes and its still only 3.5% down.

Big players like Ford, GM, and even tech companies are betting on Detroit.

It's clear they don't do an INITIAL loan based solely on LTV because they want me to have at least some cash in.Is the strategy to take this loan, stabilize the property (rehab and rent), and then find another lender who will allow me to full cash out refi based on LTV solely?

The IRS generally does not allow switching back and forth between aggregated and non-aggregated status year to year.

This intermediate step allows you to develop the required systems while the consequences of mistakes remain manageable.One strategy that worked well for several investors I know: partner on your first larger deal with someone who already manages multi-family.