.: 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?

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.

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

We supply the same that we use at home.

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). 

They provide flexibility and efficiency, especially for experienced investors.How have you found the terms and structure compared to traditional options?

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.  

A terms sheet will tell a pro whether you know what you're talking about and give them a structure of the deal you propose, but it won't establish credibility with respect to your financial ability to pull off the deal.

Additionally, your loan purchaser would supply the necessary documentation.

Large gifts, including real estate, may benefit from structuring around this limitation.