Is it overkill for a potential non-problem?

Personally I only use my HELOC on short term projects like flips, new builds and BRRRRs where I know I will be replacing the capital within months.You may be better off waiting a year and save up more cash or liquidate your index funds if the returns on a property will be better.

The IRS partially validated it by saying it is taxable, but they also tax illegal earnings.

If they don't approve the project, all the time and money spent chasing it yields no return.3) Market Risk: The market can change during the entitlement process, which can also work in your favor like it did for many Developers in 2021.That's why knowing your municipality, understanding their processes, and making wise decisions in selecting which projects to pursue are crucial.Success in development requires choosing the right projects that 1) meet your criteria and 2) have a promising path to approval.The good thing is that this risk is compensated by having a higher return.

Can't you come together and figure out a solution where he returns and addresses your concerns and collects the $2K?

If the property is in service then it’s reported on your 2024 tax return.

My specialty is working with investors and business owners in locating island based cash flowing rentals and or non rental second homes. 

If you're looking for this service in Columbus, your investment will most likely not produce much returns if any. 

You'd be surprised how often a deal can happen using this strategy but it is also important to run the numbers and make sure your COC return, etc are in line with your expectations.Probably the lowest risk is partnering because a seasoned investor will verify the deal (hence their participation) and likely take care of the initial money required.

However, lenders want to see the additional guarantor receive consideration in return for their guarantee.