The problem comes in if the stock loses value, which means you’ll have to come up with more cash or the stock will be sold to cover your position.The beauty of investing in real estate is that you can participate with far less money than stocks.

Substantially All Participation Test.

@Shawn StitelerUsually if it's an equity structure, where you are splitting the cash flow, and not just paying a flat interest rate, then the investor participates in the upside of the opportunity also, the refinance proceeds and/or sale.

Are you trying to broker institutional paper from hedge funds?

Outside of residential lending, I would encourage you to seek out commercial products from local lending institutions. 

You also have to have materially participated (google the irs definition) .

You definitely don’t have to participate in it if you chose not to.

On top of this, you have to prove that you materially participated in the rental property business for the property to be able to take the net losses in the passive income against the active income (your fiances W2 work).

Thank you everyone who has participated in this forum thus far!

Not really, because you don't know what your final price would be until the auction ends, and you generally have to register with the auction site to participate, and many require you to close in cash, not to mention many investors are already looking there so if you win a bid you may be overpaying.