Here are five dangerous provisions to watch for in an Operating Agreement:Dangerous Provisions to Watch:Authority to incur debt without investor approvalPower to make loans to other entities/projectsAbility to cross-collateralize with other propertiesPermission to use investor capital for other venturesCommingling of funds across different projectsWhy These Are Potential Ponzi Indicators:• New investor funds could be used to pay existing investors• Project-to-project lending can mask poor performance• Cross-collateralization puts your investment at risk for others' failures• Commingling enables masking of financial problems• Lack of project segregation enables fraudulent schemesProtective Measures to Look For:Strict single-purpose entity requirementsProject-specific bank accountsDebt limitations and investor approval requirementsProhibited related-party lendingClear fund segregation requirementsProfessional Best Practice:Request bank statements showing separate accounts for each project.

20% down, mortgaged the rest through a local bank How did you add value to the deal?

At it's basic level:Assumption: Asking the bank to turn the loan over to you and going through the normal underwriting process, credit, income, DTI ratio etc SubTo: Taking over the loan without telling the bank, no underwriting, no credit check, no income verificationBoth have risks, but it's not my intent to be detailed in this post.

I’ve bought some houses with 0% interest for a year credit cards and a few with consumer lines of credit from banks.

Meaning they went into a standalone bank account (not mixed with your other personal funds). 

Lastly, they’re going to want a higher interest rate than they can get from the bank for taking the risk.

Deed transferred to my name Sep 2023.Renovations from Nov 2023 - December 2024.No appraisal done at death.

Do you think this issue is specific to banking services or what do you think is the root cause?

He is looking at a group of investors like myself to bring 25% of the project value and then procure a bank loan for the remaining 75%.

With the exception of building a trailer on the property (these are hard to finance), this sounds like a good plan AND if you are using it for your business AND your business pays more than 50% of the rent (if you have more than 1 tenant), then this is a more financeable property in the eyes of banks and credit unions as it would be consider a commercial "owner-occupied" property.