@Sean Doyle - Toledo is the only city I operate in.

PM's will keep all late fees, they hold the security deposits so they collect all the interest on security deposits. 

We have been fortunate to rarely hold any security funds from former tenants.

If you’re ever looking to invest in Florida, @Josh Green has a successful STR operations going on in the Tampa Bay Area that is providing his clients with solid returns year round.

Boiler room  operation ? 

Prom notes are a security unless exempt .. 

We don’t try further diversification by investing in residential mortgage loans, mortgage loans secured by property outside the U.S., loans not secured by real estate, or loans secured by farmland, recreational land, or oil and gas ,mining.  

There are also additional costs of operating and maintaining an LLC, like separate bank accounts, annual report filings, tax filings, etc.2.

I know if I were to send an operating agreement to a lender that reads "LP member will receive return of their capital and 20% annualized return" they would not approve the loan.

It is clear from the interview that their main skill set is raising money and they partner with other "Co-GPs" who focus on the operations.