as an example if you 100,000 and the syndicator is buying a 5 million dollar property he may need to raise 2 million you would buy a piece of the pie, and get a preferred rate (around 8% per year) and participate in the profit when the property is soldJJ

I prefer using the ones that participate in your success instead of paying upfront fees.

Hi BP,I'm a long time reader but finally decided to participate!  

@Will Costello,Here is the loan policy:"The maximum amount of any loan is the lesser of 50% of the participant's vested interest minus any existing loan balance, or $50,000 reduced by the participant's highest outstanding loan balance in the previous twelve months even if all or a portion of this amount has been repaid."

The Self-Directed IRA and Solo 401k DifferencesIn order to open a solo 401k, self-employment, whether on a part-time or full-time basis, is required;To open a self-directed IRA, self-employment income is not required;In order to gain IRA checkbook control over the self-directed IRA funds, a limited liability company (IRA LLC) must be utilized;The solo 401k allows for checkbook control from the onset;The solo 401k allows for personal loan known as a solo 401k loan;It is prohibited to borrow from your IRA;The Solo 401k may be invested in life insurance;The self-directed IRA may not be invested in life insurance;The solo 401k allow for high contribution amounts (for 2016, the solo 401k contribution limit is $53,000, whereas the self-directed IRA contribution limit is $5,500);The solo 401k business owner can serve as trustee of the solo 401k;The self-directed IRA participant/owner may not serve as trustee or custodian of her IRA; instead, a trust company or bank institution is required;When distributions commence from the solo 401k a mandatory 20% of federal taxes must be withheld from each distribution and submitted electronically to the IRS by the 15th of the month following the date of each distribution;Rollovers and/or transfers from IRAs or qualified plans (e.g., former employer 401k) to a solo 401k are not reported on Form 5498, but rather on Form 5500-EZ, but only if the air market value of the solo 401k exceeds $250K as of the end of the plan year (generally 12/31);When funds are rolled over or transferred from an IRA or 401k to a self-directed IRA, the amount deposited into the self-directed IRA is reported on Form 5498 by the receiving self-directed IRA custodian by May of the year following the rollover/transfer.Rollovers (provided the 60 day rollover window is satisfied) from an IRA to a Solo 401k or self-directed IRA are reported on lines 15a and 15b of Form 1040;Pre-tax IRA contributions on reported on line 32 of Form 1040;Pre-tax solo 401k contributions are reported on line 28 of Form 1040;Roth solo 401k funds are subject to RMDs;A Roth 401k may be transferred to a Roth IRA (Note that from a planning perspective, it may be advantageous to transfer Roth Solo 401k funds to a Roth IRA before turning age 70 ½ in order to escape the Roth RMD requirement applicable to Roth 401k contributions including Roth Solo 401k contributions and earnings.)

"Jeff" also gets to participate in any upside at liquidation.  

Not all municipalities participate in this program.

I don't pass savings along to them, because they don't want to participate in helping out, I can't force them to do it, and frankly, if I can get returns from mechanical investments that don't give me drama, I'm happy.  

good point - I was thinking (and it was suggested to me by a local successful investor) that participating in some way with the DM campaign - other than writing the check for it - is beneficial.

I finally was able to find IRS Topic 425 that confirms that rental income is passive even if you personally manage the property:In general, rental activities, including rental real estate activities, are also passive activities even if you do materially participate.