This service also subs the legal work out. 

I had a RE license as an Investor/Contractor and never saw that it saved much money (My experience anyway) People think you save 2.5 - 3% on every deal because you don't pay a Buyer's agent.....but most sellers are not dumb and will not automatically 'give' you that money, they will either expect that they keep it or maybe work out some kind of a split.So if you are just going to be an investor, there is no way that it is worth the cost (IMO)

It’s so management intensive and filled with conflict that it will turn a lot of people off.

The idea is if banks were doing all the owner occ loans the cost to the buyer would go down by 5k to 15k per transaction depending on the price of the home  Plus approvals would happen faster and there would not be this intense need to solve the underwriters every little crazy question  I am sure you have run into this over the years..

Use this experience to work out the kinks and build a strong boots on the ground team.

How did this work out for you?

By making sure that (1) the investors are aware of this before investing (and not just by putting this on page 32 of the PPM, but by conversation and email trail), (2) that the investors have a certain minimum net worth and or income (and not just by SELF certification), and (3) that the investors don’t put all their eggs (investment $) in one basket(loan participation) we avoid all the drama when the inevitable one out of ten or twenty investmemt doesn’t work out as planned.  

@Brian QuoIf you can afford the $900 to $1000 loss each month, it could work out.

Generally speaking though, this asset class can be argued to be one other most management-intensive. 

We had to 'pierce the veil' and have an underlying partnership agreement, bank account in the partnership name rather than Land Trust name, but it did work out to open an operating account for each property.