I did include a clause in the purchase agreement that I be allowed to market and show the house to potential renters before taking formal possession.

They also asked for a rental agreement with tenants without even having the property in my possession.

Best of all is to (assume you possess an undergraduate degree) obtain a specialized masters degree in real estate.  

To attain a passive income of around $5,000 per month, one would need to possess a portfolio of at least 25-30 properties.

The danger is the failure to respect the power of adverse markets and the disadvantage newer sponsors possess in navigating them when they occur.When and if markets move, some will survive and some will fail. 

@Brad PerkinsIn Wisconsin, a "periodic tenant" is one that holds possession (rents the place) without a valid lease (i.e. lease is expired or there wasn't one) and pays rent on a periodic basis.

They had previously moved across the country (he was active duty military) and rented a house sight unseen, showing up with all their possessions in a U-Haul only to be met at the door by the actual tenant. 

One major reason is that a lot of people care what other people think about them and they use their possessions to create a facade they present to the outside world.

@Aaron Ross,Wish there was a foreclosure expert handy ...Foreclosure is the process a lender uses to (re)gain possession/control of a property where the loan has gone into default.The sheriff's sale is part of the foreclosure process in a judicial foreclosure state. 

What is legal is having possession of the property and selling directly to a buyer; once you have an interest in the property without a license, that is considered illegal.