@Ed Rickettsthe LLC that owns the property is considered a partnership and must file partnership return yearly.

So they legally added a back porch.However, the actual building now has a back "room" which is now a functional master bathroom - so they enclosed the porch, and may have extended the porch, probably raised the floor elevation to match plus a bunch of other things.

This means you become subject to mortgage origination requirements, you may be exempt but I tend to doubt it as most "investing" in notes are not truly passive investors, they are actively engaged in a business function.

What you want to do is form a partnership with your investors.

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While we have a general agreement sketched out for how we want this partnership to operating (voting rights, out clauses, etc), I was wondering if anyone here has any resources (sites, books, etc) that might be helpful for us to make sure all of our bases are covered.

So true @Jay Hinrichs - after real estate investing the past twenty years - doing commercial, residential, land development, SFR and multifamily rentals - and especially flipping distressed properties (by buying at the auctions - site unseen sometimes - or forming "partnerships" on the court house steps) - you and I have seen about everything!

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Reserves are typically a function of age and condition of the units.

Assumptions, refinancing, partnership, co-signing for partnerships, seller financed structures, backing contractors, assuming installment sales by guaranteeing payments...the borrower fails, I get the place by a deed in lieu, buying notes with a "double closing", the list goes on.One of my best was a commercial deal, about 120% seller financing with the seller providing cash to fund the non-profit to develop the project, 850K or so and paying me to put it all together.