The mechanics of how you do this vary by state. 

@Richard York, a more formal, properly drafted agreement likely would have said that the investor has the option of being liquidated at any time after the 36th month of the hold period, provided that the cost to refinance the property to facilitate the distribution is deducted from the investor's proceeds, and provided that it's actually possible to obtain cash-out refinancing (if the value declined or was flat it wouldn't be possible).It would also provide for a mechanism in which to establish value.

If the association is responsible for exterior of building up to wall cavities of each unit, including mechanicals I would assume that worst case senario would involve all sheetrock, finish work, fixtures, paint and appliances.

Obviously a mechanical lien, or something similar, will be filed to protect my interest .... but I would like to know from the BP community if there are other things that I will need to consider in order for this to be mutually beneficial.

The Home has the following:First Floor and Finished Basement:(Owners Area)First Floor: 2 Bedrooms, 1 Bath, Office, Kitchen, Living Room, Dining Room, Enclosed Porch Finished Basement: Full Bathroom, Laundry Area, Living/Recreational Area, Tons of Closets/Storage, Mechanicals RoomBasement In-Law: (Tenant)Separate Entrance, 2nd Shared door with Owners finished basement, Kitchen, Bathroom, Living Area/Bedroom, Closet SpaceSecond Floor: (Tenant)Shared Side Entrance with 1st floor owner, 2 Bedrooms, 1 Bath, Eat-in Kitchen, Living RoomMy issue is this:Currently the owner rents out the 2nd Floor and also rents the In-Law suite to a "relative".

An older home like this will have maintenance issues if the plumbing and electrical aren't updated and the mechanicals still have good useful life.

I also appreciate the words of caution you gave me, the advice to find a real estate attorney who specializes in private lending (my current one does not) and the emphasis on being in the 1st position.

@Mark C. what about differences in regulations/laws or mechanics of the deals?

Major mechanical or electrical work? 

I work in the oil and gas industry as a inspector and a mechanical integrity specialist out of Houston, TX.