Many months ago I sent questions to my state's AG office and I am happy with the state (NC that is) Commissioner of Banks providing the interpretation.

However, the interpretation of this phrase given in Pub. 527 is (unfortunately) wrong.

You must do credit checks and most importantly learn how to interpret a credit report.

If you do not know the rules you should not be starting a business.While studying the rules join a local landlord or real estate organisation and speak with experienced landlords to learn how the regulations are interpreted and enforced in the area.

How that could possibly be mis-interpreted to mean that I pretend I am helping the seller out when I buy their property at a huge discount - I have no idea!

MN law doesn't cover this that I have seen so government employees will give you their interpretation.

The law and the courts' interpretation of the law give us some wiggle room if you have some involvement in the syndication other than just giving them your money.

The seller's agent always has the seller's portion of the work to do (showings, presenting/interpreting offers, communicating with the owner/tenants to make sure inspections/appraisal goes smoothly, making sure the title company has everything to close, etc) which warrants that half of the commission. 

The facts of this purchase could be interpreted either way. 

I find a lot of people just assume that since they inherently trust their friend/family member, a lot of the "what ifs" and worst-case scenarios are not hammered out in fine detail which can lead to confusion and personal interpretation after the deal is closed, which it should have been addressed pre-emptively before the money was lent out.