Hello Vanessa and welcome to the investment party!

It's not illegal provided you're dislosing it to all parties and not trying to actively hid it.

SignaturesThis Agreement is binding upon the parties and their successors.Contractor Signature:[Printed Name] [Date]Subcontractor Signature:[Printed Name] [Date]AttachmentsScope of Work document.Project drawings/plans.Proof of insurance and licenses.Payment schedule.Note: This template is for informational purposes only and should be reviewed by a legal professional to ensure compliance with local laws and regulations.

Have every detail spelled out, use an escrow account and daily updates verifying all parties are executing their responsibilities.

Better yet have them underwritten by a licensed 3rd party.

The rules are designed to prevent related parties from engaging in exchanges that shift high basis property for low basis property, followed by a sale of the low basis property, effectively "cashing out" without recognizing gain.If you sell a property to a related party as part of a 1031 exchange, both you and the related party must hold the exchanged properties for at least two years following the exchange.

The reason is over a course of time the vast majority will never payoff and the fund will have to foreclose and take possession which cost a boat load of money ..

It’s a win-win situation for both parties.4o

The owner, the lender or a third party? 

The Chicago Association of Realtors'® specifically state "When you become a Dual Agent, you owe equal fiduciary duties at that point to both parties in the transaction, and you lose the ability to negotiate for, strategize and advise either one."