This is what I think I know:- The borrower can choose to pay off the note at any time (by selling the property or just paying off the loan with other funds), so it is important that the legal balance covers my investment and some profit- The borrower could file bankruptcy (can someone confirm that this will only cause delay, but not jeopardize ultimately collecting the legal balance of the note)- Most of these DOTs will have a rent assignment clause, so I could try to enforce that and collect rents from tenants (essentially manage the property) while I am holding the note and trying to foreclose.

The investor ultimately tripled the value of the property.  

I know this is an old thread but I wanted to see if you were able to get more knowledge on this basement conversion and what you ultimately decided?

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Asking the MF Group     What's your purpose here, is it to grow your:- Network- Knowledge - IncomeI understand ultimately that these seemingly unrelated dots ARE connected, but why are you here, this is a great opportunity to share your story.

Ultimately we decided that the cost of doing the cost segregations right now was not beneficial enough since he didn't really have any reason to pay for them and if I would have covered the full cost then the benefit wouldn't have been significant enough to me.That said, I do know there are ways to structure your operating agreement where the depreciation can be distributed to different partners in different ways.

Start by reading the Ultimate Real Estate Investing Guide: https://www.biggerpockets.com/guides/ultimate-real-estate-investing-guide/introduction2.

But I think you may be asking, should you do the rezoning, or leave it to the ultimate developer. 

Start with BiggerPockets Ultimate Beginners Guide (free).

Start with BiggerPockets Ultimate Beginners Guide (free).