Cash-out handling.Since the refinance proceeds stayed with LLC #1, that’s essentially a return of capital or intercompany loan from LLC #2 to LLC #1.

These are most time consuming, more capital intensive, and demanding to catch up to speed quickly to get to profitability. 

If not then they are obviously short term capital gains or regular income. 

After years of learning from the BiggerPockets podcasts and forums, I’m excited to finally jump in and contribute to the community.I lend my own capital to fix-and-flip rehab investors across Minnesota and parts of Western Wisconsin.

I sold the Class C with a capital loss and am selling the other Class C, both bought in 2023.

W-2 or business income, which means I can’t actually use the depreciation that my rental properties produce.I am investing for long-term cash flow and appreciation, but the depreciation — which is a huge part of the return — is basically wasted on me right now.Because of that, I’m exploring the idea of bringing on a “depreciation-only partner.”Basic structure I’m thinking about:Partner contributes $10k–$20k toward the down paymentI contribute the rest (typically $30k–$40k depending on the deal)I handle all of the work: deal finding, due diligence, financing, property management, repairs, accounting, etc.I keep 100% of the equity, cash flow, appreciation, and long-term upsidePartner gets the depreciation for a set number of years (5, 8, or 10 depending on contribution amount)Partner gets their initial capital back at refinance or saleNo cash flow split, no equity split — just depreciation in exchange for helping me scale fasterVery similar to an LP position, but entirely backed by the tax benefitsFor someone in the 22–32% tax bracket, the annual tax savings from depreciation typically works out to a 6%–15% return on capital depending on their contribution tier.From my side, it lets me scale faster while not giving up equity or cash flow.My questions for the community:Has anyone structured a deal like this before?

I signed on loans and put in capital.

I’ve been in real estate for a few years now and recently shifted deeper into the capital side of the business, helping investors navigate today’s lending landscape with more clarity, strategy, and confidence.

At this stage, I’d focus on opportunities that match your current capital and experience.

Hey BP,I am Cody, co founder of DayOne Private Capital, a private lender based in Ohio.We are looking to partner with wholesalers across Ohio who want a reliable funding option for their buyers so more contracts actually make it to the closing table.What we focus on:Short term funding for fix and flip and investor deals in OhioFast, clear answers on dealsSimple terms and clean communication with you and your buyersIf you are wholesaling in Columbus, Cleveland, Cincinnati, Dayton, Akron, Toledo or nearby and want a lender you can plug buyers into, send me a DM and we can see if there is a fit.CodyDayOne Private Capital LLC