Encourages Larger Investments: By offering higher returns at higher tiers, you incentivize investors to allocate more capital to your projects.Builds Long-Term Relationships: Investors appreciate being rewarded for deeper commitments, which helps foster trust and repeat business.Scales with Your Business: This structure can align with the complexity or scale of your projects, ensuring that you have the resources you need while staying competitive in the market.Key Benefits to InvestorsSecurity: Deals can be secured by tangible assets, such as a deed of trust or promissory note, providing peace of mind.Flexibility: Payments can be structured to suit the investor’s needs—monthly, quarterly, or upon project completion.Attractive Returns: With returns starting at 15%, investors often see better yields than traditional investment vehicles, like stocks or mutual funds.How We’ve Implemented ThisThis structure works particularly well for our large renovation or development projects where multiple investors may be involved.

We're largely looking at value add projects (aka BRRRR **cringe**) so that the vast majority of capital is coming out once a refi is done.Not vanilla, obviously.

If the US proves out to be the safest investment haven globally and sees continued capital inflows, Treasuries will likely compress / fall and investors will turn to real estate to continue to diversify.  

If you are not well capitalized, meaning you can not pay off the loan if called, stay away from sub to.  

It might cause me financial harm as I have to sell more stocks and might pay short term capital gains vs long term capital gains.

Weigh the long-term benefits of the low mortgage rate you have versus selling and getting $500k from a sale exempt from capital gains tax.

I would provide the capital and otherwise stay passive, but hopefully grab better profits than private lending?

If you need working capital, commercial credit cards, or help fixing your credit to get funded, I'm open to helping.

I think I would try to get past the one-year mark for capital gains then sell it.

However, purchasing the replacement property from an estate where your mother-in-law is the executor and other heirs are your wife's aunts and cousins raises potential related-party concerns under Section 1031(f).The IRS generally prohibits 1031 exchanges between related parties unless both the buyer and seller hold their respective properties for at least two years after the exchange.To stay compliant and avoid disqualification, ensure:The estate sells the property directly before any distributions to heirs.You hold the replacement property for at least two years.The transaction is conducted at fair market value with no prearranged agreements.Given the IRS scrutiny of related-party 1031 exchanges, consult a qualified CPA or 1031 exchange accommodator to structure the deal properly and avoid potential capital gains tax liabilities.This post does not create a CPA-Client relationship.