Unlike traditional real estate notes is something that is easy to do from afar since you do not get access to the interior anyways so there is nothing you can physically inspect.You are correct that you will get $500-$600 a month in payments but also recognize its taxed at ordinary rates... 

Total losses amount to ~$12k: captured from net of box 1 (ordinary loss), box 2 (net rental loss), and box 4c (total payments).

If you flip a house with in a year and incur a tax rate, “ordinary income”then does all of your other income from your rentals “long term income”get taxed at the same rate as ordinary income?

You should give them a pest-free home, then make them responsible for ordinary pest control after that.I also recommend educating yourself on how to handle small pests like this, then educating your tenants to handle it themselves.

Sale Price vs List Price has a slight upward trend but nothing out of the ordinary indicating an upward trend in buyer competition.

I tell them who I am, how and where they can pay rent, how they can communicate with me (ordinary vs. emergency), and that I need to perform an initial inspection of the property within one week.

Fixed income is the worst performing asset class during high inflation.2) CDs are taxed at ordinary income so take that 5% and subtract your state and federal taxes from it to determine the actual yield.

I'm aware that K1's are usually accepted and viewed as ordinary income with 2-years returns, however I'm struggling to find a lender that can decipher the difference between a private investment that issues a K1 and a publicly traded stock such as Enterprise Products, Williams, or Energy Transfer Partners. 

Personally I would rather have the $260k now and invest it and get 8-9% than $100k now and get 6.75% over the next 30 years which is taxed as ordinary income...

May need a physical inspection, which is ordinary course for many owners.