China, Japan & Italy have this problem right now.China is trying to ignore/hide it because their short-sighted 1 child/family policy caused it.

What markups do you think they may be hiding from you?

Syndication Reporting IssuesMissing Form 8918 for reportable transactionsInconsistent investor disclosuresRequired registrations skippedWhat Doesn't Actually Matter:(Despite What Your Uncle's CPA Says)Special AllocationsNormal promote structuresStandard waterfall provisionsTypical developer promotesReality: Unless extremely aggressive, IRS rarely caresTechnical DocumentationMinor §704(b) gapsCapital account glitchesTechnical allocation languageTruth: Unless hiding something biggerProperty Value AllocationsNormal basis step-upsTypical appreciation splitsStandard promote calculationsReal World Example:🏢 100-unit apartment complex4 partners, $5M dealDeveloper promote structure= Zero IRS interestSame Deal With Red Flags:🏢 100-unit apartment complexHidden partner arrangementsArtificial loss allocationsUnreported debt shifts= IRS AttentionPractical Protection Steps:Basic Documentation✅ Clean operating agreement✅ Economic substance✅ Partner contributions tracked(Don't need War & Peace complexity)Economic Reality✅ Allocations match economics✅ Real money movement✅ Actual partner participationClean Reporting✅ Consistent K-1s✅ Required forms filed✅ Clear communicationThe "Sleep Well" Test:Can you explain your structure to an IRS agent without sweating?

As mentioned, we "openly and notoriously" record the deed for the world to see so there is no hiding things from the bank (which could be construed as fraud not to mention poses many other risks for creditor liens, etc.) 

Here is one of mine, I can't hide if I wanted to anyone with a browser can look: https://blockchain.info/tx/4705d24ddac8f5fa4c82170...

For example, I have a subject property that has 1682 SF on the main floor and 810 SF of finished basement (the majority of which is about 8 feet in height with the exception of some bulkheads to hide the mechanicals) and 271 of semi-finished basement that is a utility room basically (washer/dryer, freezer, hot water heater, furnace, some storage).

A knowledgeable investor might see a beautiful opportunity hiding under a worn facade. 

If they aren't charging a pre-disclosed & agreed upon Markup - they are probably hiding something to make money for their time.Good luck!

It is a matter of time for Grocapitus to get fined or get shut down. or He may rebrand once more or try to hide behind someone else. he does not do the underwriting, just the power point. 

However, this system can hurt hosts who hide the true cost in the cleaning fees.