The CM approach is a great way to go, and with the clients I've worked with in this manner, I have netted them savings in excess of my fees - it's a win-win in my experience!

This opens him up to all of the rules that mortgage originators have to comply with, for example:Verification of incomeVerification of ability to repayAdditionally, any mortgage in violation of the ability to repay check, or any mortgage with "excessive fees or abusive terms" can be easily voided with no statute of limitations if/when you try to foreclose on property with said mortgage. 

@Rachel Trimble$190k X 75% = $142,500 potential cash-out and new loan amount, not $80k$142.5k - $110k (purchase + rehab) = $32.5k excess cash out remaining after recovering the original investment of $110k. 

The excessive leveraging that went on in the mid-2000s cannot happen again.  

Instead you need to focus on what you believe you can get the tenant to do without going to war.On a side note I personally believe that 45 day notice is excessive. 30 days is pretty standard.

Do you want to see 15% CoC ( Ie so you can do a 8% pref and 50% splits of excess ) Do you want to see 30% upside in value so you can do a back end split of 60/40 after projected 5 year return.  

6 HousesDate11/23/2016Purchase Price 216,000 Loan Am (Yrs)20Down Payment $ 43,200 Rate %0.0495Vacancy %8%Monthly Rent 3,350 Repair/Maint %10%Rehab Expense - Management %10%# Of Units6Taxes & Ins %15%Loan Amount 172,800 Projected 1st Year Income StmtMonthly Payment 1,136 Gross Rents 40,200 Cost Per Unit 36,000 Vacancy (3,216)Net Rents 36,984 Projected Cash FlowTaxes & Ins (6,030)Gross Rents 40,200 Repairs/Maint (4,020)Vacancy (3,216)Management (4,020)Net Rents 36,984 Interest (8,554)Taxes & Ins (6,030)Depreciation (7,855)Repairs/Maint (4,020)Taxable Income 6,506 Management (4,020)NOI 22,914 Cap Rate ValueDebt Service 13,628 12% 190,950 Excess(Defict) 9,286 10% 229,140 DSCR1.689% 254,600 ROI21%8% 286,425 

I do work full time, at a large accounting firm, nonetheless, so my hustle game after work isn’t very strong, if I am to be honest with myself.I plan on purchasing properties using BRRRR, and holding them until I have enough equity in all of them combined to sustain the $20,000 monthly cash flow (after considering CapEx, and other maintenance expenses).I will then sell the excess properties, hopefully passing them down to new investors, effectively using the equity from the sale to pay off the remaining portfolio.As stated above, I have not solidified my market yet. 

@Chris Mason is a loan officer in that area and can give you very specific information.One thing though is if you are looking at 720-750k properties, you are going to be in excess of the FHA loan limits, so an FHA loan isn't going to work.

The face value numbers are intriguing: 7% preferred return with excess split 70/30; 7-year expected hold period and after return of principle, profits then split 50/50. 2% acquisition fee of purchase price and ongoing 5% fee (EGI) for management.