The biggest distinction in my eyes is scalability. 

Those are the three markets you want to start looking at for cash flow and scalability.

This forces you to put more time upfront in finding and hiring the right team and building a scalable model. 

Properties are not paid off yet (one will be at the end of this year) and once both are paid off, returns will be about 11% Return on Assets at market value.These are small time properties though, nothing that is scalable at these returns.

Open to ideas as to how to make the approach lower risk while preserving the arbitrary scalability, but it's currently as low as I know how to make it.

Is that scalable, can you dedicate the time to this strategy?

Insurance typically doesn't cover legal fees.Initially I thought this type of asset holding structure would be scalable and relatively easy to maintain, but not so sure at this point.

I would definitely recommend looking into a Series LLC, as it has unlimited scalability.

It avoids the CA franchise tax, is scalable so you can add multiple assets under it while benefiting from the liability minimixation structure of child series' , and it can streamline your operations by using one set of books, bank account, etc.

And if they have a huge network of lenders, subcontractors, scalable systems, etc. what's the limiting factor preventing them from doing these awesome deals?