If you structure it via equity rather than debt, you can get very creative with the entity's operating agreement and you can allocate more depreciation to this investor to help him with his tax breaks.

Once the developer pays operating expenses and the senior debt payment all income must go to pay the fixed coupon of the mezzanine debt.

Is there a finite amount of time that the units must be rented for before an appraiser can use an income approach based on the net operating income of my property?

.** Purchase **Purchase Price: $ 75,000Purchase Costs: $ 1,500** Cash Flow (Monthly) **Rent: $ 850Vacancy: 8% (-$ 68)Expenses: -$ 338Net Operating Income: $ 444Cash Flow: $ 406** Returns **Cap Rate: 7.1%COC: 7%Rent to Price: 1.1%Gross Rent Multiplier: 7.4

We operate on envelopes and going to the grocery makes you reprioritize if you really need that $12 bag of shrimp or if you could just sub in some leftover chicken from the freezer, or if you take the time to cut a few coupons because that $6 you saved will allow you to splurge on a bucket of ice cream for the kids.

(day to day operations)Person 2:  Master contractor, well versed in every aspect of residential maintenance/remodeling, more flexible schedule to be able to visit properties and make repairs/upkeep.  

What does the operating agreement state about buyouts?

You wouldn't ask a podiatrist to operate on your back just because he has a license on the wall...and, you wouldn't take the first back surgeon you find either.  

He operates in South Suburbs.  

@Curt SmithI'll make a really broad statement, if you do want to do one or two sandwich lease option deals a year it's not a big deal as far as being licensed, this is only my opinion but I think most "departments of real estate" could care less of 1 or 2 dealsThe big point I'm trying to make is if you want to do 50 to 100 of these deals a year, there's no way around not being licensed in most states because you're acting as a major business operation, there is a pattern of similar business activityAnd I've said this over and over, all it takes is for you to get a negative reputation at the department of real estate in your state which will stain your reputation from being licensed in the future; all it takes is one real estate broker to write a letter to the commission and now you've got headachesIt's prudent just to get licensed and build a business you can be proud ofA sidenote:  I think a lot of people on BiggerPockets think that if you are licensed it stops you from doing creative deals,  that's not true at all.Regarding sandwich lease options on nice houses in nice areas, Dodd Frank excludes your relationship with the owner as an investor, if your subleasing and sub optioningI think there's a great opportunity for you getting rent credits and doing creative contracts with your owner as an investor with sandwich lease options, but don't be broke and not have some reserves like 3 to 6 months in case the tenant buyer doesn't pay you when you sub option and subleaseAnother issue is be careful of who you let into the house and make sure the tenant buyers  work on their credit and save money for down payment and they truly want to be homeowners.