On the contrary, if you are working with a reputable PM company focusing on decent size commercial asset's, i think it is good exposure in my opinion.

The funds seem like a good way to gain greater exposure and get an extra layer of due diligence done for you, but there must be downsides as well.

I will be sure to have this conversation with the seller to reduce some of my exposure.

As an aside, flipping is an activity that can create tax exposure through Unrelated Business Taxable Income. 

Also remember your tax exposure from flips will be much greater than buy and holds.

Then advertise on site like CHBO, https://corporatehousingbyowner.com/ to get exposure to companies seeking housing in the area.

First of all, those black streaks while sickeningly high in nicotine (and I mean that literally, you'll get sick with too much exposure) are actually tar residues from tobacco smoke.

@Brian Eastman are there any books, websites, or readings you could direct me to on how to limit UBIT exposure on leveraged rental income.

Your cost and risk exposure is too great, even if the property was cash flowing.

Also, since it covers multiple properties, instead of buying 2 million worth of coverage on every rental dwelling policy, you only need to meet the underlying limits of the umbrella with each individual policy and pay for the 2 million worth of coverage once through the umbrella.It might be less expensive for you to purchase that liability coverage on your rental dwelling policy now and start the umbrella later, but it will be more economical sooner rather than later.Typically the additional coverages over your personal exposures are worth it anyways.