Apparently they take preferred interest in your company or have you sign a UCC cash flow agreement.

And assuming a 0% return on the $200k you could have in the bank earning $10k/year if you sold. 

To be more specific about what i'm looking to do: My 1-2 year goal is to employ the BRRRR strategy with SFHs and Condos by buying distressed / highly undervalued properties that need work (preferably all-cash) in low crime areas with strong rental demand, renovate them within budget (again preferably all-cash) and get them rent ready before refinancing them at the highest ARV possible.

Purchase price: $62,000 Cash invested: $60,000 Project in progress: Off market dealPurchase: $62,000Rehab: $60,000ARV: $165,000 What made you interested in investing in this type of deal?

You are correct that putting 3.5% down on a fourplex likely won't cash flow after one year.

While it will not reduce the actual cost it will help with the monthly cash flow.I am curious if this was a single-family house converted into a double.

This negative position can consume years of cash flow to recover.

Our cash on cash return is essentially infinite as we make money on the delta between the yield of the discounted note that we purchase and the interest rate we pay to our passive private capital partners. 

Purchase price: $275,000 Cash invested: $129,000 20-unit hotel, was abandoned and had sat on the market for 3 years.

Each former member is then free to either do a 1031 on their % interest or take the cash and pay the tax.The opposite manuever was more common until around 15 years ago.