I am sure I am simplifying and I am not an attorney, but I would tread very carefully here. 

I almost see this as very riskless strategy to make money lolHi new here and there’s a lot of terms, can you simplify what you’re saying here plz? 

Let's say a rental property gets 12k in rental income, passive.Cost seg gets 50k, resulting in passive activity loss of around 38k.The amount of passive losses carries from the Sch E to the 8582 to determine the loss allowed.In this case I assume no other passive activities and no active participation exception.In this case the amount paid for the cost seg is worthless and may be for several years, especially considering rent may stay stable while other expenses have not been accounted for which add to the depreciation carryforward and add to the chance of limitation (in this very over simplified example).No losses are allowed on Schedule E, which flows to Schedule 1, to the front page of the 1040.Again, just a simple demonstration of the flow of the return.

This would simplify things and keep you from needing to provide documentation beyond asset documentation for reserves since the loan is based solely on the property similar to a commercial loan.

Here’s an overly simplified version of what I mean, but keep in mind that I’m watering down the numbers too much.

On this forum, it is often useful to point out the need for contributions to the plan to come from earned income from self employment since a lot of members here have self employment only from rental income and that, by default, doesn't qualify.I don't recommend the ROBS structure for anyone, but even those that do usually recommend it only in specific situations depending on the type of investing you intend to do with the plan.To simplify things a bit and possibly help narrow your focus for additional due diligence:1.

CPAs likes to simplify the coding to make it look clean and to the point.

This doesn't solve the COI yet it simplifies the process and saves some time.  

Only time will tell how effective the Agreement will be in simplifying the clearance and indemnification process.

I'm hoping I can simplify things a bit, while leveraging multiple properties for a better average price.