I decided to take the role of the GC in renovating my duplex and subcontracted my electrician, plumber, HVAC, and general labor.

I could use more exercise anyway :)@Kenneth Reimer Good points to consider.  

John will be doing the remodeling to convert the garage and do the addition to bring it up to 10 beds for the residents.The way I understand and asked my attorney to draw the lease (I should be reviewing the draft within a week or so) is John can exercise the option at the end of the lease not prior.

Having spoken with a few securities attorney about it, there is no loophole: if you're a passive investor and he's managing the investment, then it's a security.The only way for it not to be a security is if you have an active role in managing the investment, however limited that role is.With that said, there are people doing JV deals every day and it's not like the FBI is going to kick down your door and send you to jail.

After 24 months I will either assume 100% of mortgage cost or have to exercise my option and purchase the property for remaining mortgage balance.

My real estate background has been primarily in a research and analysis role over the last 16 years with various prominent companies.  

These are bonds that are posted in order to offset certain risks associated with persons in fiduciary roles where the level of risk of misappropriation might be higher than that of an executor named in a Decedent's will who is a sole heir. 

@Tony Beal Hey Tony, don't forget to get a look at the Rent Roles and the contracts in place so you know you are looking at good numbers on rent and vacancy.  

What is your role as a real estate agent? 

Once you go through this exercise, it will become very evident to you which ones are the studs and which ones are the duds, cash flow-wise.