Year 2 had some large expenses, including some CapEx items (water heater, roof).

If you have good credit and plan to refinance if rates ever drop significantly, I would lean toward Conventional. 

Inherited tenants are usually a negative, however in that area leaving the duplex totally vacant makes it a target for thieves to come in and steal your pipes, furnace, and hot water tanks.

Use to use water, it does not work as well over the masses.

The pipes have to be dewinterized so I would have a plumbing professional there prior and when the water gets turned back on just in case.

If you are taking about dropping a million cash into properties each year, then yes you are going to want to have some type of reasonable corporate structure, but if you're talking about 25% down 100 grand properties with bank notes, all you really need is some decent insurance.

So if your big into water sports, living in the desert could have all the profit in the world but it's going to be miserable hell and odd's are after some months the profits wont matter.

I have had a home destroyed by fire; never by water.

Each unit is individually metered for power and water. 

I'm giving a reverse example, as in I will show how my credit score dropped 59 points in one month because I forgot to do my "trick".The trick is to pay off your entire balance the day of your "statement closing date".