This is the guy that needs to make payroll every week.

There are additional depreciation benefits for taxes that will make the 42% equate to something higher when compared to a flipping business or other investment (could be as much as +60% if you're in a high fed/state tax bracket)Successful flippers might look for annualized ROIs in the 100% range, though they have to pay payroll taxes, and is a more time consuming effort compared to using property managers for your buy-and-hold rentals.

There is no management, no vacancies, no loss to rent, very little capital expenses, no payroll, just taxes, insurance, utilities and minor repair budgets.We have one right down the street from a full blown, full service car wash and it has cars in it every time I drive by!

Maybe the judge sides with the tenant and says that this was not a purchase/leaseback/repurchase (a complex transaction that the sophisticated investor understood but the naive homeowner did not) but just a simple matter of a loan.

A lot of people do a pref with some split in larger, more sophisticated deals.

I always selected partners or "investors" who were sophisticated enough for the deal.

The difference is Roth withdrawals are tax free.Any business that has a payroll can open a 401k (traditional or Roth).

I am not that sophisticated!

Start with people you know - friends, family, your doctor, lawyer, neighbor, business professionals, etc.Public advertising for private money can be in violation of state and federal securities laws so consult an attorney.Some of the very best resources for private money is from people who are not sophisticated investors who invest in CD's.

By passive, I'm talking about someone who doesn't want to actively run a property (would rather hire management) or who has no interest in managing rehabs (though would consider investing in them).Lets assume that these investors are likely not sophisticated to start with, but over time, will get there.With that in mind, lets look at the following cash scenarios and see what kinds of ideas we can come up with.