My goal is to diversify with an investment that generates steady cash flow, even if it requires a larger upfront investment and lower overall returns. 

Syndication Reporting IssuesMissing Form 8918 for reportable transactionsInconsistent investor disclosuresRequired registrations skippedWhat Doesn't Actually Matter:(Despite What Your Uncle's CPA Says)Special AllocationsNormal promote structuresStandard waterfall provisionsTypical developer promotesReality: Unless extremely aggressive, IRS rarely caresTechnical DocumentationMinor §704(b) gapsCapital account glitchesTechnical allocation languageTruth: Unless hiding something biggerProperty Value AllocationsNormal basis step-upsTypical appreciation splitsStandard promote calculationsReal World Example:🏢 100-unit apartment complex4 partners, $5M dealDeveloper promote structure= Zero IRS interestSame Deal With Red Flags:🏢 100-unit apartment complexHidden partner arrangementsArtificial loss allocationsUnreported debt shifts= IRS AttentionPractical Protection Steps:Basic Documentation✅ Clean operating agreement✅ Economic substance✅ Partner contributions tracked(Don't need War & Peace complexity)Economic Reality✅ Allocations match economics✅ Real money movement✅ Actual partner participationClean Reporting✅ Consistent K-1s✅ Required forms filed✅ Clear communicationThe "Sleep Well" Test:Can you explain your structure to an IRS agent without sweating?

Also, in order to get financing the lender wouldn’t allow SCI to dramatically overpay or they wouldn’t meet the debt service requirements.

Very subjective question based on your investment knowledge, home market, investment strategy and requirements. 

The standard rule is $250k per person who legally owns/occupies for the 2/5 year requirement. 

Instead, it reduces the seller's net sale proceeds, which may impact the amount required to be reinvested to fully defer capital gains taxes.For the buyer, the credit lowers the property’s basis rather than being deductible as a repair expense.

Unfortunately NY requires a RE license to wholesale in the state.

How are you handling the new LAIC requirement in Cleveland?

You need an income that meets three requirements:Rents increase faster than inflation to offset constantly rising prices.It must be reliable; it continues even during economic downturns.It must last throughout your lifetime.These are all long-term requirements, so the current interest rates are not the major issue.

The high end is the 20 or so co ops on 5th Avenue or Park Ave (one is on East End Avenue) that require liquid assets of $100 million + to gain board approval.