Chances are you will still have to put your own capital into the deal, but this method, if done properly, can minimize the amount of capital required. 

If you buy some non-local notes as well, what would you consider proper due diligence in those cases?

I will let the situation develop on that particular issue.

I am trying to understand something about the background history of a Manhattan building that was purchased 6 years ago by a developer in order to turn it into luxury rentals.

What would make this property appealing to a land developer/investor? 

@Lucy ChangIn addition to filing a federal + state tax return - some cities/counties have their own filing requirement.It appears that San Jose considers you to be doing business within their boundaries.Below is a link to their website with instructionshttp://www.sanjoseca.gov/businesstaxYou can hire someone to do the proper filings for you or you can look at the instructions and do them yourself.You should look at the instructions on whether to put yourself as a sole proprietorship or a partnership.

If the neighbor had proper insurance it would probably have covered it, but I don't know how she ended up faring (I haven't brought it up with her, but the beamer is still all cracked up in the driveway a year later so I don't think it was covered). 

This will insure title/permit searches are done properly and updated prior to closing.

Yes you can do it but there is more regulation since the 08 crash so you need to check NC laws about how to do it properly.

Or they don't feel that they can vet the deals properly.