Thus since in both cases you as a short-term landlord are merely providing basic services to your short-term guests (and receiving passive income in return), I would think this meets the requirements for Schedule E and I would think that you can report the income on Schedule E even if you don't own the property, thus avoiding the 15.3% self-employment tax?

Saw this and it kind of concerns me that basically im on the hook for any stupid thing they do.

But lets back up a minute, let me cover some basics for folks who don't do this all day like me. 

And I’m curious why you would permit this project if it weren’t required?

Also, since you will be doing short-term private lending you should consider a Checkbook IRA (which is basically a self-directed IRA on steroids).

He already has the $50k with the hard money lender however they will only release funds once first phase of the project is completed. 

I come across both fix & flip projects, as well as stabilized cash flowing rental units, primarily small multi-family with some SFHs as well.

These technological advancements not only improve the speed and efficiency of construction projects but also have significant implications for sustainability.

I moved here from Florida after seeing the projected growth.

I personally don't worry about reserves and keep my cash in hand while deploying HELOC's for projects.