Here is a past post describing the way to handle this. https://www.biggerpockets.com/forums/51/topics/393996-how-to-best-handle-boarder-income

An LLC doesn't provide you the ability to deduct something that wasn't deductible before.You also want to be wary of 2% itemized deduction which is what you are describing a lot of your expenses.They are currently non-deductible at the federal level.

The dollar amount and what you use it for is not so relevant in this discussion, but your question does highlight the options a lot of people face when looking at using the equity they have in their home, thus the amount of people who are drawn to this thread.One way I've described the first lien HELOC strategy is "instant refinancing" based on how quickly you can access your equity once you obtain the HELOC. 

If that's the case, it may be simpler to just talk with the syndication sponsors to see if they'd make an exception for you.In general, mixing money across your natural financial boundaries has some risk, so creating partnerships like the one you describe should not be done without due consideration.

What you just described is a variation of what I refer to as a perfect system.  

The strategy you described makes perfect sense, especially given the relationship-driven nature of the commercial industry.I appreciate you taking the time to go into detail about why this approach works so well.

But non-arm length transactions are certainly legal and what you're describing sounds doable. 

I remember hearing on the BP real estate podcast at some point Scott describing how selling an investment property after 5ish years and trading it in for a more expensive property was the right move financially.

Not so much, I think it is their self described "band of scrappy bankers and engineers" actually just trying to create a white label service where the QI has no liability and no effort to expend other than holding the money in some account doing heaven only knows what to make their profit.

Folks what was just described is the job of a real estate agent!