Like you mentioned and what I've read is the deal structure and sponsor carries the biggest risk so thank you!  

SHORT TERM OWNER FINANCE - Ask the seller to carry the note for 12 months until you can owner occupy. 

The latter process would take more time (due to capital generation from other sources), cash investment and end up with much less capital appreciation over time but would also carry much less potential risk. 

The client is seeking a minimum of $3,750,000 to pay off the first lien, but would prefer closer to $4,500,000, which would provide a few months of interest carry prior to the potential new tenant taking occupancy.

(I had additional carrying costs from a HELOC, which meant I walked with around $45,000) What made you interested in investing in this type of deal?

Quote from @Carrie Matuga: @Joseph Fenner I love your goal and how high you've set the bar.

However, if you have other investments that can carry these losses and still have positive portfolio cashflow AND gaining significant equity, maybe keep it.... 

This project carried with it a estimated $97,000 rehab estimate as well; another huge cost.

(I had additional carrying costs from a HELOC, which meant I walked with around $45,000).Aquisition:We found this deal on a wholesalers website who we keep an eye on.

You may show losses that can be carried forward and offset future capital gains.