There can also be substantial tax benefits if structured properly. 

However, poor operations, poor financial assumptions, poor finance structure, or a combination thereof can quickly turn a great deal on paper from hero to zero.

I would use the Lender tab here on BP to call around and find a lender or broker you may want to work with and compare loan structures and pricing. 

This amounts to lost opportunity because if you had purchased RE, at the closing it can start producing return. 5) ADUs detract from the existing structure whether this is privacy, a garage, or just yard space. 6) this is related to number 1, but there are many more buyers looking to purchase homes for their family than there are RE investors looking to purchase small unit count properties.

Hi @Mark S. each fund is different in structure, some are preferred return only, some are profit split, some are a hybrid, some are debt only, depends on the fund and the sponsor.

What does it tell you when a city can't afford to put a few structures with colorful lights for the holidays?    

Here's a revised response with a more structured format:---Hey JeffIt sounds like you’ve got a solid deal in the works, but I totally understand your concerns about the 5-year seller carry.

And how do you typically structure those deals to make them a win-win?

From the top of my head - mildew, moisture buildup, dust, structural cracks...

Financing structure?