Biggest problem is if you run into replacing rotten sheathing.

Furthermore, with private investor money on the line, even in the event of a loss, I personally make sure my investors are paid, so BK is out of the question for me and for others, it ruins their track record, their credibility, and their credit score and history.I have never seen a contractor mistake put him or her out of business.

I purchased with HML or private money and refinanced within 90 days. 

It has a $16.90 Cash on Cash return and could increase my cash flow $373 on the conservative side.My question is, how do I split the profits with a private lender?

There is a single family home listed in a decent neighborhood with a basement area that has a private entrance.

I have no way of knowing how good of a deal you are getting, but if its got  equity over and above the 3 1/2 % you are putting down, you could find a private lender to borrow from.

Is this privately owned and just showing up like that because of a tax exemption, or does the government own it?

For investments that are relatively static and singular in nature - shares of a private placement for example - the services of a self-directed IRA custodian can be sufficient. 

The biggest problem they face is actually accessing their money.

Some of our private lenders are making 12% on their money.