The house in question is located in West Milford, NJ and is a 1963 3 bed 2 bath split level on a pretty level .25 acre lot right outside of town center with natural gas but septic, well, etc.

So lucky for you partnerships dont actually need to be filed with the state, they can even be oral in nature.

I had hoped that the natural draw of Disney etc would work in my favor but there's just too much inventory.

Typical assumption is that security deposit would 100% go to cover property damages - that's the whole nature of the deposit IMO. 

There are clearly downsides - the investments are even less liquid than active real estate, they are completely out of your control and they are long term in nature.  

I was under the impression that this call would be somewhat informative in nature rather than a call simply to schedule another call with one of "Scott's attorneys". 

As others have pointed out, interest income from a partnership can be classified as either "portfolio income" or "ordinary business income," depending on factors such as the nature of the partnership’s activities, the number of loans, and whether the interest is incidental to your main business or a core activity.

If someone truly believe that the 17% is real and they could borrow money at a smaller interest rate, using the fungible nature of money, the person would take a loan to get into that deal, but a feel most people would not risk there primary residence on a deal like that. 

Naturally, that doesn't work for us!

Hello Ayoka, You can deduct certain expenses related to the rehab of the property, but how you deduct them depends on the nature of the expenses.