What are the challenges of passive investing as opposed to traditional real estate investing? 

Challenges?

So providing housing in these areas is full of challenges. 

Hi Kris,It sounds like you’ve got a great property under contract with a solid entry price, and the only challenge is the interest rate of 7.125%.

If you are organized enough to forsee hang ups and talk with your GC about potential challenges on a regular basis, two brains are better than one.

Tahoe isn't ideal right now as the local community is vehemently anti-Airbnb and the permitting system is challenging to navigate.

However I did note that houses are mostly really old, e.g. 100 years or older... any idea if this poses challenges in things like lead paint presence, outdated wiring, rusty plumbing, etc., or have many of the homes already been updated?   

I do not recommend someone who has never owned real estate to do a fix and flip as real estate is challenging and cost prohibitive, I recommend if never owning real estate to start with an asset that does not need major repairs. 

Challenges?

I have considered doing a TIC/coop in San Dego but have the belief, without any data except for how I would value the financing challenges and tic risks, as being much greater than 10% price difference from condo price.