The original post leaves the door open for a challenge by the IRS, so the safe harbor of holding it for investment for two full years is the safer option.  

We have around $150,000 available for investment.We understand that finding deals in this price range in Phoenix itself might be challenging, so we’d love to get your input on areas near Phoenix where our budget could work.

Two things not covered so far:1) If a buyer challenges a seller-financed transaction, the Dodd-Frank penalty is that the lender must make the buyer whole.

However, I cannot find any court cases where this is currently being challenged.

In a city like Philly, you will face many challenges - you need to learn the market and know the neighborhood and the block and make sure all of your numbers are within reason, you need very reliable contractors, you need a to understand the permit process, you need to be familiar with market expectations. 

I have never been shy of facing challenges and I truly believe knowledge is power (something my grandfather taught me at a young age)I really want to learn everything there is to learn about realestate and am driven and hungry.Thanks in advance for any suggestions or recommendations.

Then progress to permits and then building.You could also just do it and hope the city doesn't notice, which they probably won't.Your challenge will be getting Certificates of Compliance on the units!

This is probably why you want to bring equity back into your US business and any other investor might make the same choice as you.I brought up the challenges to come up with the solution, which was my last paragraph.

The nature of the relationship to me seemed exploitative and it bothered me a great deal. 

By setting appropriate expectations, we can ensure a smooth and successful investment journey.When it comes to syndications, there are unique challenges in exiting or restructuring investments due to diverse investor expectations.