Eric,, I think why people go for the fund model is the idea that they are spreading their money into multiple notes being held by the company.. while in theory this is great but as you noted you don't really have any security compared to being the beneficiary of the debt instrument IE debt is in your name. 

I was able to build a great understanding of the distressed 2nd mortgage industry.

Hell, i've seen attorneys volley contracts back and fourth with each other for months on end arguing things like the meaning of the word "the" in "the contract".....All while racking up those $500/hour billable hours of course.Case and point, I won't change your outlook on the industry.

Here are the key numbers:Potential purchase price: Mid-$400k rangeAppraised value: Estimated at ~$500kRehabbed comparable properties (comps): ~$580-600kMonthly PITI (with 5% down, including mortgage insurance): ~$3400First-year PITI (with 2-1 buydown): ~$2900Monthly income (after taxes): ~4-5kLiving expenses (utilities, groceries, etc.): ~$1600Savings available: ~15-20% of the purchase priceCash to close: ~$34kRehab estimate: ~$34kRemaining reserves: ~$20-25kTo fully fund the rehab, I’d need to come up with an additional ~$15k in the short term, which I anticipate paying back quickly once the rental portion is generating income.

Understanding your potential gain compared to your potential deductions can help you decide on a strategy.

Do this quickly because some counties have a time limit on when you can appeal.I recommend you research the market for:- Comparable Property Sales- Condition of your property, including anything that may affect your property's value- If you are really serious, an expert appraisal may be worth the effort.

When I see deals that do pencil for an investor, the LTV is 60% or less (I deal with mostly retail and industrial). 

Mortgage debt is good debt COMPARED TO OTHER KINDS OF DEBT.

Leverage magnifies return. 3) The effort involved in adding an ADU is comparable or larger than a rehab associated with a BRRRR.

Mashvisor – Helps compare long-term vs. short-term rental potential, especially useful if you’re weighing both options. 4.