If he rents it out for 5 years, he now has to pay capital gains tax on that $300K (and any subsequent appreciation). 

He is securing expensive debt, not debt through a bank, isn't putting any capital into the deal and structuring the equity investment in a highly risky manner without any upside offered to the investor.

1.Is there an interest reserve and is it funded entirely by borrower at closing or is it capitalized into the loan? 

 (2) You can also use Lead Swiper to target buyers online.Private Lender Leads: (1) Lead Swiper can easily target private lender leads (2) Nationwide Private Lender database (although this is 1-time payment premium feature, it's cheap), if you want access to capital, quick and easy, it's a no brainer.Hope that helps.

I've head from others who went this route and had to pay before delivery which caused strain on capital because they couldn't complete draws in the same manner as stick built construction. 

In our market, it is probably a bit more desirable to go after smaller multi and of course it depends on the capital you have.   

I've been interested in real estate investment since college but I've either been without the capital or without the confidence to take the first step.

If Costa Rica gives more capital gains like you suggest (which I doubt given how pricey it already is), he's going to get them with his own property and he'll ba able to take advantage of it without needing anybody's consent.I think the question is whether you can lure a lifestyle buyer into seeing it as a better opportunity than if he'd own his own property. 

Plus, you'll be higher in the capital stack in debt.DST's are basically managed funds, in my opinion. 

Would the federal tax liability be $140k at year 5 for the sale, with long term capital gains (ignoring any Net Investment Income Tax)?