The Tiny Home would be acquired for ~$50,000, and he suggests it could generate gross profit of $4000 a month. 

I am buying each house with the hopes of 20k net profit. 

I know it’s not profitable, but my cash is in the bank, I just don’t know where to put it where it for sure won’t go negative.

In my experience the only way to make any money with a USDA property is to syndicate LIHTC funds and secure a developer's fee, as the rents rarely generate any significant ongoing cash flow.Kyle

Well not everyone but enough to make it very competitive and tough to do it profitably. 

YUP  I could have flipped this plat to DR for a quick 1 mil profit but we decided to build it out and that brought us an additional million plus in profit .. of course you have risk reward.. flipping to DR takes all the risk out.. but we were and are confident in this market and price points.. the over million market is slowing a lot of PDX or taking a breather as I like to say.. but the 350 to 500k is still robust and that's where we play

My involvement would become worthless.If the investor stays off the note but gets 6% + 50/50 of the remaining profits than it would be fair. 

It has not been updated since I bought, new, in 2009 and is in average shape.If I sell, I'll make a 20% profit off the original investment (10 yrs).Would you sell or would you keep?

That is not 7% of the profit but 7% of the total amount given to the seller.

The Tiny Home would be acquired for ~$50,000, and he suggests it could generate gross profit of $4000 a month.