If you’re confident the remaining funds can be reinvested into a stronger opportunity, like your new duplex project, it might be worth it.

You have to have confidence and the Sponsor needs to build a relationship with you if he wants to be sure you have some insights into the risks of the types of deals you would be funding. 

And I could use additional 200K or so to fund my next investment property. 

There is a lot of public info out there on their funds and how they are (not) performing.  

Let's say the AC or Heat goes out in 60 days, do you have funds to cover that?

70/30 investor fund structure to make this deal go.

I see it every day in my fundings I do in 8 markets. 

I agree that the upside here is knowing most of the mechanicals need to be redone upfront, so there should be fewer ‘surprises’ along the way.Setting aside a solid contingency fund is a must—do you have a rule of thumb for that?

You'll want to look at their reviews, how they safeguard your funds, understand what their fees are, and how responsive they will be to your questions (do they work 9-5 only). 

Trying to save $$ so I can prepare emergency funds in case of any major repairs etc .