The loan he currently has is an ARM from 2008. 3.

The contractor or homeowner then has to arm wrestle and send in legitimate bids/supplement requests to increase the payout to fair market pricing. 

I think it comes down to you the investor needing to raise your financial IQ to be able to advise your tax professional on what to do so they can implement the strategy instead of them strong arming you into a conservative and poor tax play.

For ZO, the risk is offset since they have their own title company, their own mortgage origination arm, plus they get the data, all of which generate revenue above the spread.

There’s a lot of red flags potentially raised with the IRS if it’s a non-arms length transaction - especially if it’s “too good” of a deal.

It's a 10-year ARM, but no balloon. 

@Joseph HammelWhy not use a portfolio lender versus the ARMs? 

I got a phone call from a police inspector letting me know that the night before there was an arm robbery in an apartment of a building I own.

@Sophia BahenaSomething that hasn’t been said, is that there can be tremendous advantages to having a network of others who are already operators in real estate.Some property management firms can be deceptive, in that they are just a self management arms of real estate developers.

I always recommend involving a professional (attorney) in handling anything that involves some type of personal relationship, that is not an arms-length landlord-tenant transaction.