If using a PM, they are expensive and often bring the return in line with LTR.  2)  STRs and MTRs are at risk of increased regulation.  

I am reaching a point where I am starting to build up some cash, so I am looking into ways I can invest it and increase my cashflow for years to come!

I know that sometimes that will be LESS than the market rents are increasing and occasionally faster than market rents increase.

If it was built as a triplex or was legally converted and recorded and rental license is inactive it can be pretty simple to get an active license on the property - especially because it is RM-1 zoning. 

But I note that foreclosures are increasing. 

It has been booming for the past couple of years with strong job growth and population increase.

And if so, what is the cost and prospect for collecting something, certainly not all, but something.My thinking is that if it shows up on their credit, it may hamper employment, car purchases, rental applications, education funding, etc and at some point they would need to pay me to go forward with some major life steps over the next 10 years.Your time and money would be better spent updating your rent requirements to get better tenants, increasing deposits if allowed and proactively evicting tenants who are behind so you don't get back in a position where someone owes you a substantial amount of back rent. 

Any investors in the Houston area with experience in building an addition for a home to increase square footage and add value?

Between 2004 and 2007, interest rates increased from 1% to about 5%.

The shorter the prepayment term has an impact on increasing the rate.4.