Maybe you or your wife have a friend who could benefit from a lower cost of living.

However, other variables like economic conditions and emotional purchasing decisions can result in subpar investments and lower returns."

The ease of just handing over cash is infinitely more tolerable than a difficult real estate transaction that most likely isn't even understood by the heirs.

However, it often results in lower profit margins and less control over product quality and delivery times.

And in terms of demand, I can tell you from experience that 2-bedrooms have lower occupancy than 1 bedrooms, so it's not worth the extra money if you're after cash flow.

You should have a transactional real estate attorney represent you when negotiating the Joint Venture Agreement and formation of the special purposes entity (i.e. an LLC) that you'll be a member/limited partner in.

Between just those 3 items, that's tens of thousands in tax return and lower of the tax brackets as whole. 

@Rick Pozos  AS Rick noted he has not had issue when had to foreclose but he is also in Texas VERY short time lines..But you do the same transaction in Mortgage states were forclosures are judicial and time lines are years..

Identifying a d purchasing properties that are undervalued due to under market rents caused by owners with a lower purchase basis that are terrified of losing tenants and raising rents, will definitely provide you with immediate upside appreciation when adjusting rents to market rates as well as covering all your holding costs and a cash flow reward every month. 

I believe it tends to give me a slightly lower return, because the sponsor is going to be more careful, and if there is a severe downturn will prevent me from taking catastrophic losses.