Both of those options puts you in a better situation financially and leverage wise than total cash injection into one rental.Kind of like the saying "Do not keep all your eggs in one basket" is one way to think about the risk/reward.

I think I mostly appreciate your point about letting the property gain equity organically over time to refinance without additional cash injection on my end.

I don't really think it's a ton different than other types of RE Investing, but you can't get a personal benefit from the property, you can't comingle personal and IRA funds, you can't use personal funds on the property and vice versa, you can't use recourse financing, etc, but it really does allow for other sources of capital to inject into deals.

That additional interest coupled with climbing property prices makes it hard to positively cash flow without a major cash injection. 

Both community leaders injected so much funding and energy to help people succeed in real estate investing.

USDA  requires a 20% tangible net worth or equity injection into the deal but many of the other aspects are the same as SBA.

Hi Daniel, I think the big question is "how much cash do you have to inject?"

Now, an accountant/CPA/attorney would recommend that you use a "cash injection" accounting method and drop it into your business account.....but that is NOT necessary for this strategy.  

You can pretty much do what you want, but I would think based on your partner's lack of financial injection that you might want to split ownership and profit percentage to protect yourself and incent your partner to do a great job. 

A few, but certainly inadequate list of things to consider: be clear of on role and responsibility, what happens in a variety of events:- Divorce- Bankruptcy- Required capital injection- Sale- Ect...On the compensation side of things.