It’s not just for large portfolios, an LLC can protect you if any issues arise with tenants or the property itself.

small portion" of profit is not worth the possible legal issues.

A grand negative cash flow is not the issue.

we are still assessing the rentals we manage but overall are just finding a few minor issues so far. 

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.

Bob - I have five occupied padsplits under contract right now with Fernando Corona and have closed several with him this year.Normal DSCR brokers have issues getting this through underwriting - it's important to work with a broker / lender that fully understands how to get these to CTC.I'll PM you

It really shines a clear light onto the issue.

I've asked my clients a similar question and have developed tools for them to minimize this, but I find there are a few different types of clients.Manager managed - these folks have no issues as they simply upload their year end statement from their property manager, their 1098 mortgage statement and any other one-off expenses they may have paid for outside of the management company. 

This is not just a racial issue. 

Be prepared to face fluctuations in the market, unexpected repairs, and tenant issues.