@Maria Diaz You’re asking all of the correct questions.

Any other requirements on the seller to do this correctly ?  

One demanded we paint the interior the color they wanted or they wouldn't renew their lease.8) MoveOut damages typically exceed their security deposit.

It’s one of the mistakes many investors make by not titling their real estate correctly from the start.

Some of what they are saying is correct, like having a separate bank account to hold security.

Would I be correct in thinking of it that way?

Anyone who has actually been active in this space will know that borrower behavior can be predictable and irrational, and they might have a fundamentally different mode of operating their life than you do.Along with viewing the world your way, many think "their way" is the correct way so that is how it must be done.

somewhat correct - If property A is non-passive, you wouldn't be able to net it with other rentals that are considered passive.

Creating these complex structures from what I have experienced only costs me time and money and potential issues down the line to make sure documents are signed by the correct people and entities etc.

If you were to buy a “basket” of real estate diversified over our entire country, then yes, you’d be correct.