I imagine the latter would help conserve water usage, but the prior is easier and some tenants don't want to pay for hot water but they could run up the bills at my expense and I'd have to wait 1yr to adjust usage.

@Ray Detwiler  You are overcomplicating this process and it appears you are confusing anonymity and asset protection.

As an agent, it’s clear your connections helped with the deal, and financing it with cash likely made things much easier.

Locally is easier El Paso, DFW, Austin or other cities/counties are all holding rentals properties either now or coming to market.

If you can finance an entire deal that way, it does give you the potential to buy out the preferred equity and own the entire deal yourself within maybe 3 years.I think preferred equity is easier to raise in today's climate. 

I know it gets easier with your 5th or 10th deal, but I'm talking about my first one here!  

If that isn't feasible for his situation I'd recommend looking for rentals in the southern/middle part of the country where price points are much easier and the laws are landlord friendly.

Also you have to constantly look for customers and you competing with highly competitive hard money lenders.Lendng under $50k is great idea because most HML don't do loans less then 100k.So I found that traditional real estate is much more passive and easier but I still be interested in private lending on a deal to deal basis I such deal falls into my inbox and it passes all check and balances. 

Working with a property management company can make the whole process easier and more efficient.Good luck!

Networking with others who share your goals will be crucial, but having that firsthand experience will make scaling much easier.