Its set by the market.

So if this $330k puts them close to the limit, and the market makes a downturn, there will be a margin call.

It really doesn't apply as much anymore in most markets because rates are too high and homes are selling for too much. .75% rule is more viable and would be the new 1% rule in this market.

If not, I'm guessing it would be treated as a traditional rental loan, either conventional or DSCR, using market rents rather than the rent in the lease agreement.

The client can distribute proceeds through a private agreement without involving the title.

The two most common exemptions are the exemption for intrastate offerings and the exemption for private placements.  

You could get a loan from a local bank or private lender to fund it

Your question has been debated between BP tax experts both privately and publicly, for example here: https://www.biggerpockets.com/forums/51/topics/819991-expens...And we ended up where we started: no consensus and no clarity.There have also been court decisions that support my interpretation, even though I personally find these court decisions debatable.

I can buy a 2-4 unit with 20% down vs conventional can only buy a 2-4 INVESTMENT property with 25% down 4. there are options where DSCR loans dont repot to personal credit, helps in not having to show a bunch of paperwork or not one person in a partnership has to carry the debt5. way less paperwork to close on this loan type vs a conventional loan. we care about the income of the property you're buying and it's ability to service the debt of the property whether we use long term rents income, lease income, or air dna/bnb income.6. easily buy in partnerships, add people to your operating agreement, its as easy as that so bring partners into a deal. helps with scaling and raising capital or getting partners involved7. gift funds allowed to close on these as well, and like I said earlier, there's only a 10day seasoning period of funds with some lenders so that means you can literally have a private money lender deposit money into your account 11 days before closing, and you can use those funds to close!

Here’s our OPINION for the Metro Detroit market (use as a template for your target area!)