The area’s limited number of apartment buildings means that many renters prefer single-family properties, creating steady demand for these homes.Happy to chat further if needed.

However, understanding the passive activity loss limitations is crucial before making this investment.

Lending capacity should only matter to those with large borrowing needs and require large legal lending limits but that wouldn't apply to hard money lenders anyway.

Just ensure to complete necessary due diligence - this can include, but is not limited to, title search, property inspection, appraisal and/or survey. 

If so, is there any red flags such as rental restrictions, limitations, etc.

Most look at a Certificate of Insurance and confirm coverage limits but best practices are to (1) become added as additional insured under contractors policy and (2) understand coverage exclusions which are not going to be detailed on an insurance certificate.

Quote from @Sam Evrard: How do you go about finding areas to invest in with limited capital? 

The Exchange Accommodation Titleholder ("EAT"), often a sister company to the qualified intermediary, will form a single-member limited liability company and disregarded entity or ("SMLLC") to serve as the lessee.

@Kiryl Ulanovich,You're on the right track:Get Pre-Approval from Hard Money Lender – Know your terms and limits upfront.Find a Deal Through a Wholesaler – Verify numbers and ensure it meets your criteria.Review the Assignment of Contract – Confirm terms, earnest money, and contingencies.Conduct Due Diligence – This includes an inspection (if allowed), verifying ARV, and rehab estimates.Submit to Hard Money Lender for Final Approval – Lender will review title, contract, and property condition.Title Search & Clear Any Issues – Ensure a clean title before closing.Close Through Title Company – Finalize funding and take ownership.Consider also lining up contractors early for a smooth transition into renovations.

Really asking those who have a limited number of properties.