It's only illegal if they are asking investors what they want and then go out and find it because that's brokering which requires a license.But the point is that they don't even realize that they can be the wholesaler, receive a larger "commission" in the form of the wholesaling fee, and then make double commission if the investor decides to sell the renovated property.

Anyways, in my thoughts about what I want to accomplish in 2022 I realized I'd yet to appreciate 2021.

They aren't stupid and realize what a good deal is when they have once. 

Although my properties have doubled, tripled and some even 4X my buy price, I haven't realized the gain because I haven't sold!  

If I add the $50k in losses, maybe this 8% cap rate goes down to 6% (I realize it would not actually work this way from an accounting perspective).

Most people don't realize that lease terms could be negotiated because on most average rentals they are not negotiated, but that is what happened and I think you acted fairly and have nothing to worry about. 

Just realize that GC's must work today to earn today's income which isn't the passive lifestyle that attracts people to real estate investing.

As I'm starting my journey into apartment syndication, I'm realizing the most time efficient way to scale is through partnerships.

Thanks everyone for your thoughtful responses.I did not realize that a HELOC is harder to obtain on a rental property.

Do realize there are other mortgage products out there outside of the FHA loan that could be beneficial.