You got rid of a liability and picked up an asset in your trade so I think you made a great decision there! 

I'm considering a similar scenario to what you describe, a relatively high quality SFR BRRRR that about breaks even on cash flow after considering all taxes and equity paydown, but not Capex reserves.I see what you mean about holding the asset and eventually owning it with no initial equity investment.

I help investors “unlock” their IRAs and 401Ks to be able to invest in alternative assets such as real estate.

You have to be the type of person that will collect/evict as needed, you need to be the type that is either able to do work yourself for turnover or have a existing relationship with a crew, and you need to understand the culture of the neighborhood.I don't have any of that, so I don't buy that type of assets... and from the sounds of it like you I rather a higher class asset with different tenants.

This will also help you avoid paying taxes (no property has been sold) while ensuring you are building up your asset base. 

I wouldn't invest in any privately held, illiquid assets like (2) (I would NEVER invest in a non-traded REIT!) 

Househacking is probably the easiest and most effective way to get started, in my opinion.You can reduce living expenses, learn a ton and also acquire an asset!

It all comes down to opportunity cost (why invest in illiquid real estate market when you can invest in other liquid assets like mutual funds/reits if the returns aren't better).

A wise mentor of mine said “turn your house into the bank” and so if you borrow against your property, to then buy another property, in a sense the bank “doesn’t care” because you know have two assets, not just one, they can come after if you default.

If you can put your money into an asset that is growing at 5-7%, and you can get a line of credit against that asset at Prime, then anything you do with that borrowed money that earns more than Prime is adding value on top of the dividend/interest crediting rate of the cash value in the policy.