I bought these two houses that were next door to each other with a partner using hard money (3pts, 13% interest, and 1% extension fee every 3 months after the initial 6 month term).

We try to set up at least 3 timeslots each week when we can schedule all the showings to minimize the tenant interuptions.If they won't cooperate or cancel too many scheduled showings, we warn them we will pursue collections to the fullest extent of the law. 

I would recommend planning for some unexpected costs on an extensive rehab like this, especially if the current tenant didn't treat the house well.

But we just don't know how extensive the damage is on the inside. 

So I told my tenants I wanted to switch to RentRedi for payments because it was more streamlined than collecting checks and such but then they would be forced to pay the $1 transfer fee.

Look into Baselane it’s designed specifically for real estate investors, You get automated rent collection, expense tracking, it makes it easier to manage properties, stay organized, and keep up with your finances. 

I will do my due diligence and extensive research before making any moves.

Just let the money live in the house and collect rent as the only ROI?

Based on a quick answer from Perplexity it seems like there would be no issue with you buying the home and collecting passive income, but you may not be allowed to manage it yourself since that is considered active work.

Also, focus on 2 years of job/income stability.Class D Properties:Cashflow vs Appreciation: Typically, all cashflow with little, maybe even negative, relative rent & value appreciationVacancy Est: 20%+ should be used to cover nonpayment, evictions & damages.Tenant Pool: majority will have FICO scores under 560 (almost 30% probability of default), little to no good tradelines, lots of collections & chargeoffs, recent evictions.