@Bruce Woodruff While it may seem like a simple concept, it's actually a very complex process that requires significant documentation as well as specific methodologies.

The concept is that a homeowner receives an upfront cash investment today, and in exchange, the investor gets their principal back plus a % of the property’s future appreciation at sale/refi.A few things I’m curious about:– How did you structure the agreement (lien, contract, equity share)?

I think that I now I understand the concept.

I am local to Indy and am trying to make investing for out of state folks simpler.

Just keep in mind that managing multiple LLCs can be a bit expensive, so some investors combine properties in one LLC to keep things simpler.

My day job is a scientist, so I just applied the same concepts.

As a real estate investor, you should generally purchase properties under an LLC to protect your personal assets from liability related to the investment, while buying in your name may seem simpler and potentially cheaper (in the savings on interest) but exposes your personal wealth to financial and legal risks.

It seems like you may be mixing together a few different concepts - but someone qualifying a a real estate professional under 469(c)(7) does not default their rental income to Ordinary income subject to SE tax. 

Anyone who mass teaches a concept and gives you the impression that it is acceptable everywhere, is "blowing smoke" to collect membership fees.

I am near Pittsburgh and am interested in this concept.