But once you declare to be running a trade or business - then 1099s do come with the territory.If you really want to avoid 1099s and decide to claim to NOT be running a trade or business - be prepared to lose your business overhead deductions upon an IRS audit.

Other distractions include non income-producing activities - aka any distraction pulling you to do something other than speaking with and following up with people.How can I prepare myself?

You are much better of preparing for the worst case scenario and adjusting your strategy accordingly.  

Eliminate all your bad debt first, prepare your savings even deeper and put it on a downpayment for a single family house if you do not have one.

I'm genuinely asking to understand the use case for my self for an individual investor.Re. balance, as someone who is a former CPA and has prepared financial statements for multi-billion $ funds, I understand the important of a balance sheet.

Also, Investors need to be prepared for and understand if there are additional costs that come with foreclosures, such as water bills, and potential fines for property upkeep.

A smart seller will have note, deed of trust/mortgage/etc. prepared by a local real estate attorney (yes, he/she may work with/at the title company) and be sure the security instrument is properly recorded in the land records. 

You can definitely do this in Phoenix, but be prepared to be hands on. 

Ask your property manager to prepare a staffing plan which would show how they would staff the property and what the salaries would be. 

The trust preparer suggested we put our rental properties into the trust as they are currently owned personally.