Write up a very nice email explaining that it could be easy to misunderstand the law and then explain how the rent that is due is just postponed not erased.

So I’m concerned this could possibly tie most of my capital on my first deal and prevent me from doing a burrr again in the future.Am I missing something or have a misunderstanding about how to make hard money work on a brrr as the original short term loan?

Maybe I am misunderstanding the question but I see this come up when a house has multiple buyers involved.

Minimal contribution, misunderstandings of the mechanics and insufficient experience and lack of funds.  

Depending on your taxes and insurance for the property: $600 may be a great offer, just be sure you spell out what you are covering with that payment so there are no misunderstandings.

@Gautam Venkatesan that's a common misunderstanding.  

@Jonathan Kono Either I'm misunderstanding the situation or this isn't really an issue.  

I didn't find out about it till I had 6 properties, so it was too late for me but I have heard of others that started this way.Now this may be a misunderstanding but I have a friend who was able to buy 3 rentals properties at 5% down, low interest 30 year loans.

If we assume, and feel free to correct me if I am misunderstanding what you mean there Eduardo, that does not relate to raising capital (from yourself or others) then that reads like you want to generate 40% returns or more annually.  

Accepting money from a potential tenant, whether it is for rent or security deposit, without a signed lease first, puts you at a serious disadvantage and opens you up to all kinds of risk, misunderstandings, and problems, as you are now finding out.I think your attorney has given you very bad advice.