Look up the instrument and read it.

DST's are fee ridden instruments.  

Is there a way to pay him $270k "on paper" so he doesn't get hit with a long term capital gains tax at 15% and then pay him the remaining balance of $180k over time through a consulting agreement or other instrument where he would avoid the tax.

The banks and funds will still bid - and they bid fairly low rates because even a 4% return is better than other very short-term instruments.

Interest rates are national, but appreciation and rent growth are specific to the metropolitan area and property segment.Unlike the stock market and other financial instruments, rents and prices are driven by supply and demand.

Either through the loan it self, like limiting the loan to value to a level which will accommodate recovery of the advances required to enforce the security instrument, or through limiting the capital invested in the loan through discounting.  

Things you must not do You must not;i) commit an act of bankruptcy; orii) fail to pay me on time any money you have to pay me under this contract; oriii) pay any repayment/s with a check, directdebit or other instrument that is subsequently dishonored by a bank; oriv) fail to comply with any condition of this loan contract; orv) make any material false or misleading representation.8.

To me, whenever exotic instruments pop up and start to gain steam, it means the end.crash is near.

We brought on another partner who was instrumental in working with the seller regarding the seller financing portion of this deal. 2 units are vacant that need some moderate tlc that should be able to be tackled in a weeks time.

So from an access to capital standpoint, a HELOC is a very worthwhile instrument.