It is deducted in a more advantageous place on your tax return.

I think the best way to evaluate an additional investment is "Return On Investment".  

I have significant amount of money invested in stock right now and reasonably trust the average index fund return rate of ~9.5% to continue (of course, been getting much higher than that the last couple years, but we're in a bit of a bubble).

After close, the money is going to be used to fixed the problem, whatever left will be returned to seller.This escrow holdback will be available depends on lender.

This debt investing with guaranteed % returns upon the financing or equity sharing? 

2: Are you getting the promised return?

It's about cash on cash returns/more capital to invest in next investment

The cap rate and reversion cap rate was manipulated to artificially raise the total returns up by 30%.

I simply want my money and my return that he stated is owed to me.

If it's decided we can make a better return by rehabbing the property if taken back thru foreclosure, then we'd split this rehab cost 50/50.