I've owned the house for few years and have spent a lot of time trying to design an addition to add value to the property, but the current floor plan is really not conducive to realizing a return on that investment (tiny living room, low ceiling basement, poorly placed basement stairs, etc.). 

Done right 2%/month return on asset value is possible. 

You could get into a solid multi-unit or a single-family rental with real cash flow instead of hoping your Katy rental eventually fills.Not saying you should walk just yet, but if leasing drags out longer than expected, would you consider selling and reinvesting somewhere with better returns?

It can easily take 6+ months to find a motivated seller. - Just be prepared, because a motivated seller typically has a property with issues you need to be sure you can solve.

I always recommend to make even a little passive income from a rental after all your expenses, lets be honest you put a lot of effort into this rehab so you should reap a little return.

While the 4% mortgage is great, your 1M in dead equity isn't giving you a great return.

No personal income or tax returns are required.

Any issues that occur with the property can easily be solved with the property manager working nearby. 

Quote from @David Hori: I've been vetting gurus to determine where an investment would return the greatest ROI. 

I think about this often, its really just running the numbers - if you borrow 100k at an 8% interest rate, will the investment get you more than an 8% return?