Risk would be high...Just one insurance claim in excess of a $5,000 deductible could sink your battleship if you do not keep cash reserves.You still need to pay for your own health insurance For every unit you own outright you get an additional $400 or so in income.

Two years of tax returns is excessive.

When doing "finish caulking" (baseboard, crown molding, door trim, ect.) the last thing you want is to be wiping away loads of excess caulking.

There will be quite a bit of overflow as the polymer is "self leveling" which forces the excess off the counter top. 

Anything lower, you can pass a great deal to your buyer and make him happy or split with him or keep all the excess.

What happened to Detroit has nothing to do with lack of illegal immigrants, and everything to do with automation, and excessive union demands.

You also need safeguards in the Operating agreement, power of sale of assets, so the property can be sold, him paid off, proceeds going to you of any excess and the termination of the LLC.

Likewise, if all of the “excess” deals were sold to others through the SDIRA (wholesaled, etc.), this may appear to the IRS as an “active” investment.  

Although I've never tried them, mainly because of the 3-year waiting period (excessively long IMO) that is currently on the books, I have looked into how the tax sales work in our state.The general gist is the tax sales are once a year. 

Excess passive income rules comes into play when you have been a C-corp before and have accumulated c-corp earnings & profits.