The fund was advertised as a boring "preferred equity" fund that pays 10% a year (or something along those lines).  

The bank will sometimes take the excess funds (difference between redemption amount and winning bid) as a immediate cash benefit on their books and write off the loan.  

Use your funds to convert the 2-bedroom units into 3-bedrooms to boost rental income.

and investing in CDs or investing in a stock index fund or even using the money to buy a good cash flowing rental.

You may qualify for a cash-out refinance, which could help you get funds for necessary repairs while locking in a better rate.

It's about teamwork, mutual understanding, and planning for the future together. 

From there, I was able to keep rolling my funds back into projects and keep increasing the margins. 

I hit that goal - which was incredbily tricky given my lack of funds and the overall lack of lenders lending on sfh investment properties back then - six years straight exactly. 

That, to me, sounds like an attempt to get small monies to fund other things, but will not enhance the other parts of your business.

One thing every investor needs to be aware of: No real estate fund or syndication is FDIC insured.You may come across phrases like "the money is in an FDIC insured account," which only means the funds are held in a bank account, not under someone's mattress.