I have sweat equity in each of them. 

If their goal is truly to 'work' in real-estate, as in actual sweat equity & time, then I suppose there is no substitute.

We exceeded our small goal this year after purchasing a duplex and a 4-plex, using the same strategy that we used on the single-family rentals (purchasing properties that had room for sweat equity and increased rents). 

Chris,     Exactly my view on sweat equity, that is an advantage over many other investors, the more I can do myself the better.      

You would do this to incentivize yourself to perform, and to show your friend that a return on his investment is more important than compensation for your sweat equity.  

I wouldn't sweat this (pun intended).

Some say managing it yourself is fine, just don't allow 'sweat equity' to disqualify your whole deal.

The only way to get around it is if you are willing to put a lot of sweat work into a property or buy in really bad areas.

I would say the average RE investor is NOT getting this type of return on their own without having to put in a lot of sweat equity.

We're having it white-boxed so we can put in some sweat equity on the finishes.