Hi,People always talk about how they purchase a rental property, wait a few years for it to appreciate, do a cashout refi to recoup their initial down payment, then whatever they earn in the future is infinite return.But in reality, how is this truly a "recouping of initial investment" when you have to pay a 4.5% interest to take out the cashout proceeds (with $3000-4000 of closing costs on top)?

I'm from Dominican Republic, no product like that out there. the best option is to buy with the proceeds from the states. 

It also affects what our proceeds were for that year , so we likely have to file and amended return.Can there be an arguement of fraud in this type of situation 

It looks to me like you would be essentially giving WWC a loan to be paid back through the property's earnings or a refy or a sale...and then you would get 65% of all proceeds after you get your invested capital back...Most syndications I have seen, the sponsors offers a preferred return (6-8%) on the investors' capital until the capital gets repaid in full.

How should I proceed if the terms will remain the same?

I'm a huge proponent of being able to lawyer without the assistance and expense of counsel.In the big scheme of things, eviction proceedings are quite informal compared to other actions and really the question becomes 1) is there a valid lease?

As luxury vacation short-term rental hosts, has anyone faced a similar situation or have suggestions on how to proceed?  

Once the flip sold, we would take the net proceeds and pay back the HELOC.

2) Also, is it allowed for proceeds of both sales to be used as down payment towards 1 single asset?

Not only flippers, but in my experience sellers that offer BAC tend to do better than the ones that do not (as far as net proceeds).