BUT, I am getting the impression that if the sponsor pays back your capital and the prefered 8%(from the above example)...you no longer participate in cash flow and/or any of the appreciation when the property sells?

Cash flow for lower-tier props can look amazing on paper, but there are a lot of other factors that make real-world returns less impressive.

This has been a good discussion and a civil one at that, I'm impressed.  

. $2,500 per month is impressive, nice work!

But if the landlord is getting 450 a month, I don't get the impression he is doing much quality maintenance over the years.

They were apparently more interested in trying to impress me with their scare tactics and feeling threatened by someone asking them a million questions, I guess.Anyways, fast forward now about 3.5 years, and after WE got out there and rented a massive drain auger and ran it for a few hours - and we have  not had ONE more issue with the drain line on that house.Roto Rooter makes bank - and they do it on a culture of intimidation, scare tactics, and lack of understanding on the part of their customers. 

It was impressive.

Yea I have been really impressed so far.

It's a impressive opportunity, and I think @Sam Grooms and @Ben Leybovich have done a KILLER job, very specifically with their underwriting process on this. 

I'm impressed.