@Enrique Toledo  Any update on this potential deal and what you wound up doing?

This will clarify and reinforce what you are reading.

I'd bet that this note is worth more to you than to most buyers until the note is much lower LTV, but I'm a novice in this space.

In this case it might be more of a 20/65/15 to get what you need out of selling the 1st. 

You should have a MAO to this deal.

In all the other states where this is legal there is no state or fed reporting or oversight.. thats the point..

Cities and communities are also cracking down on people using homes for this.

Looking for guidance on the best way to proceed going forward in terms of asset protection and how to structure all of this real estate… 

@Albert Gallucci as many have pointed out, in the commercial space of 100+ apartment buildings and offices, property classes have some pretty decent industry standards.We started applying these to 1-4 unit properties around 10 years ago, which you can verify on our blogs, because we saw too many newbie investors not properly taking into account things like, neighborhood status, tenant pool, property condition, etc.Unfortunately, there's no industry standard for this, but you can use some basic logic to think your way through your own Classifications.

This will clarify and reinforce what you are reading.