One additional thought: a disregarded LLC might work for you if structured correctly.

Let me know if you need help with financing or structuring the deal.Best,Drago

Why risk your personal credit or you time and energy in needless mistakes when you can build a strong business structure, secure funding, and grow smarter from the start?

When it comes to structuring your real estate business, choosing between an LLC and an S-Corp can feel like a big decision—and for good reason.

We supply the same that we use at home.

PML is not some putz that you're gonna dictate to as far as terms and structure. 

During your initial walkthrough, inspect the property for any major issues such as structural damage, roofing problems, plumbing, and electrical concerns, while documenting all cosmetic and functional issues with detailed photos and notes.Once you confirm the property’s potential, finalize your ARV and calculate the repair costs using either a reliable estimator or insights from contractors.

.: Hi All,Is there any way to structure a private lending arrangement so that income is considered passive (by IRS standards) and can offset accumulated schedule E losses?

Caused by the seller can still be attached to the property, the buyer doesn’t get to keep the sellers interest rate when they execute the lease option, they have to pay full closing costs and get the new rate, etc. so it’s apples to oranges compared to a subto structure). 

Add in many/most jurisdictions are (I believe incorrectly applying the law) mandating the existing structure be rent controlled (assuming it is over 15 years old).The reality is virtually all RE investments will do better than adding an ADU.