Better option for personal use but perhaps not rental. 

As long as no “healthcare” services are provided (like medication or personal care), it’s not regulated by the Department of Health.

@Shawn Questa I agree with you that there could be some opportunity here, but personally, with that little equity in the property, I'd wait for the pre-foreclosure process to start and  perhaps you can do a short sale (though I don't know the details on how that's handled in TX).

Personally, I'd start looking in markets you're familiar with, similar to what you said in your post.

However, you can get loans that are based on the performance of the rental and not your personal income and debt.

The question is mostly a personal financial planning question and it depends on your preference and what balance of risk and access you'd like and would be comfortable with.

I'm a passive investor and these properties are in a different state than I reside in so I'm not there in person often. 

I have personally worked with @Wale Lawal and he is awesome. 

While this job could be performed remotely, working with my peers in person for at least a year is important to me.

They will schedule an inspection to verify that the second bedroom does in fact exist in the apartment.I am not sure, I believe it’s because this apartment is only being rented by one person on the lease.