He wants to make a little more on his money than a CD will provide.

Yet with rates higher and banks paying 5% ON CD'S why take the risk with such a low cap?

Put it in a CD and she can earn 5-6%.

@Noah Ogle - You should try to find the big players doing what you want to do in your area and work to provide them value without expecting anything in return.

You’re better off just putting the $500k in a cd and getting paid $2k/mo in interest and spending $100 of that on insurance. 

If the cost exceeds the benefit, that must be revealed, and just like buying and selling a home, most of the players are incentivized to keep the product moving, not to do your own due diligence. 

Reason I ask is most do not realize the interest income is taxed at ordinary income rates, so if you are in a higher tax bracket, that 8% you are getting ends up being in the mid 5's, which is basically the equivalent of a CD right now but just a lot more added risk.

Especially if they lose a key player?

If you are going to purchase SF homes in lower barrier  C/D neighborhoods be conservative with your debt, set aside plenty of reserves and consider half if not more of your appraised equity to be the result of a generous appraiser because you will likely never see the equity converted to a realized gain. 

CA for instance has hundreds of thousands of paper lots that were created between about 1900 and 1935. these paper lots get sold at tax sale all the time and its where a lot of the land geek type of players toil.