Do not pass go, go straight to jail and pay the $14,000 fine.....plus whatever civil costs arise. 

Syndicators who brag about their instagram lifestyles without a big old pile of exits... probably bought that lifestyle with their investor's money, whether Ponzi scheme or exorbitant acquisition/management fees.That... or selling high ticket coaching items on the power of real estate.

Even though WE are NOT originating a loan here; it would be the EX-Husband who would be "originating" the Loan (by taking back the Deed of Trust and Note) in order to SELL his 50% interest in the house, the TIE IN is with our BUYING or INVESTING in the purchase of the DOT and Note to generate CASH to him, and CASH OUT to Her is wherethis becomes a "Gray Area" of whether it violates any of the CFPB Consumer Financial Protection Bureaus requirements and could be re-characterized as a high cost LOAN IN DISGUISE ALTERNATIVE THINKING We are thinking a better way to go here IF the EX-Wife agrees; it to SELL the house NOW, pay off the EX- Husband and enter into a 3 year LEASEBACK with the buyer of the home. 

>Seems to me that at scale, a portfolio like Luka's would indeed build wealth over timeIt is cash flow negative in a market that has an appreciation rate (2.17%) for this century below the inflation rate.https://www.neighborhoodscout.com/oh/cleveland/real-estatehere are some thoughts about your plan: - why perform a value add in a market where the value add does not add much value especially if the property will be acquired at no cost?  

My returns also got a bit too complicated with niche REI stuff for the great tax guy I used for many years and still does my parents and sisters taxes.They handle other REI guys and attend some REIA groups I went to and knew about bonus depreciation, K1, cost segs, schedule E and HELOC junk used for investing and private lending.

I hope Colorado realizes how  much this is going to cost them in tax sale revenue.

Low cost investment that fast forward 3-5 years it will be worth much more allowing you to pull out equity/cash to buy more.I see investors buying $350K homes only cash flowing $400 a month, so Yes 100% good deal.

It will likely add value less than 50% of its cost.  

@Gerard Scranton - we have gone the partner route in similar situations in the past by giving an equity stake in exchange for cash and labor.I would find the nastiest houses in need of work and put up 50% of the combined purchase price and rehab cost and then I’d bring in a contractor partner to bring in the other 50%.

You can leverage your money to purchase more property, you'll increase your return, you'll earn more, and you get tax benefits.Read a few books on real estate investing to learn the power of leverage.