The risk is worth the reward (at work we call it Operational Risk Management).

Thats if the simple google search isn't working.

It's a simple solution to a distressed homeownwer, but it seems like there isnt another way unless they are willing to do 'sub to'.

I’m in a 506(b) on the GP Side right now & other than the ability to advertise under 506(c), one reason one wouldn't go with 506(b) and accept Sophisticated investors is increased liability.We feel comfortable and run a tight ship so we’re not too concerned; However, our SEC attorney has drafted all docs (operating agreement, subscription, & PPM) and has encouraged us to have the PPM be a more robust version because we are allowing sophisticated investors to colloberate. 

For a first timer would it be as simple as approaching a real estate attorney for help crafting the note and going from there?

Most of it is simple math, Income vs.

I'm not sure exactly what your operating expenses are BTW, but let's assume it's 45% of monthly rents including insurance, taxes, utilities, vacancy and maintenance reserves, and property management- 1350/mo.

Am I correct that Capex is not counted in the operating expenditure, and as such is not reflected in the NOI? 

Regardless, even when I included insurance, the total expenses were about 33%, but I usually make my operating expenses at the industry average of 45% and that assures me I've got things covered. 

If you don't have access to some sort of line of credit then I'm a fan of keeping things simple.