I have been to a few of them personally its really something and the folks that own them are under the radar and make MILLIONS.

If the management fees stay in Sch-E, it is exposed to ordinary income both at Federal and state level, which is way higher than SE taxes of 9.55% (15.75-6.2 (personal social tax already maxed out)).2.

I am the only person that will be able to update you in this matter.

Have met him personally a couple times and he is just a great guy all around. 

@Robert BriggsSince a cash-out refi and HELOC aren’t viable options in Texas, and personal loans have high interest rates, consider a few alternatives.

Liability Protection: An LLC provides legal separation between your personal and rental property assets, which can protect personal assets if a lawsuit arises.

@Jorge Liang Closing the loan under your personal name saves about $1,200 in lender points, but transferring the title to an LLC later comes with costs and risks.

When you say "income is taxable to the person that earns it", are you talking about the information on the w-9 provided by the employee, as the person who earns it?

I'm willing to help this person in any way I can.

I will still make all payments and be personally responsible.