This is one of the problems with housing in lower tier markets because on the surface they appear to be great value but capex makes it impossible in many cases to keep them up and running and therefore the cash flow from your spread sheet rarely translates to reality.

It will depend on the quality you're looking for..

And the "hook" is that it's paying 12%+ interest distribution plus depending amount LOANED (one may say invested in a note but again, if a note is a loan, it's not investing is it, it's a loan, a loan is a loan is a loan). 

Depending on how much you need to raise the rents to market, the other updates in the building that are needed, how quickly you can rent to market rents will all drive your decision.

To answer your question, “it depends on how much money/net worth you have.”  

It depends on how long you plan on holding the property for.

It also depends on your goals and how safe/aggressive you want to be, how much you want it to earn, and what meshes best with your lifestyle. 

Many investors start with personal ownership and transfer the property to an LLC later, but it depends on your long-term goals and risk tolerance.

What you do depends on your long-term goal.

"Mileage" from both of them depends on an investor's overall tax profile and tax strategy.