That said, with an experienced flipper, hard money in LA should be between 10-12% and private money all depends on your own resources but typically 7-10% and not over 10% in CA due to usury laws (unless the lender is licensed or a licensed broker underwrites the translation -which defeats the purpose of avoiding a HML).

As far as I can tell, banks allow sub-to alterations to title arrangements quite often, and anecdotal evidence seems to suggest that the loans don't get called in unless defaults start to occur?

I assume you have something like a 50% expense ratio every year - so basically this improvement will net you $600 additional dollars (1200 times 50%), which translates into a 12% return on investment @ $5,000.Everyone has their own goals on what is an acceptable return.  

Common sense seems to cry out that a sale involves receipt of "cash" (equity) and I understand why the IRS would not want a "sale" but if you continue to roll into an equal or greater FMV investment, you really haven't altered the basic nature of the investment.I'm sure greater minds than mine have spent much time deliberating this issue.

Because there is a lot of case law routinely piercing single member LLCs as nothing more than an alter-ego entity.

We would not be touching or trying to alter the wetlands area it self.

Example: purchase price = 199,000monthly gross rents = 265550% of 2655 = 1327Mortgage payment= 8051327-805 = 522 estimated cash flow monthly Cap rate 7.9%With 50,000 down, that gives me a cash on cash return of 12.5%I realize the 50% rule is a very basic estimate any many things can alter this, but do my numbers seem correct?

You could alter your PP and work out some sort of arrangement with the HOA to see if they will reduce the fees and that will reflect in your PP, or you could leave it up to him. 

If you are right next to an anchor you can try and put in a co-tenant anchor clause where if they leave then you can terminate early or reduce rent until another anchor is found.Also if the road is 2 lanes for example you might want language that says if road construction,road widening, access is changed which materially alters the function of the retail space and center for an extended period of time you have the right to reduce rent or terminate the lease early.

I am an active investor in the capital markets which I believe would translate well to the real estate market.