If this initiative gets on the ballot and is voted in, then it's chosen by the people as a method of ensuring they have better quality homes to rent. 

I gladly paid a 7% premium for quality work, done right the first time and fast. 

I can't speak to the NE side, but I think that might be decent as well.

I've not yet done the math to determine which strategy would save me more money, but the big cons of this areNo primary residence, therefore slightly higher interest rates, 20 - 25% down (but depending on the market, this may very well be equivalent to 3.5 - 5% down in LA).Depends on the quality of tenant screening, but it's probably safer to assume that they won't take as great care of the property as I would.Probably need a property manager, professional or tenant.Either strategy seems to net me the same cost around $1,500 monthly, but I'm biased towards Los Angeles as I can rent to friends which solves a lot of the tenant/landlord issues.I'm not looking for anyone to give me all the answers but would appreciate any insight, food for thought, and constructive criticism. 

The LLC also needs to obtain an EIN.Your best next step is to speak with a CPA.

Perhaps someone can speak to that but that is not my question

Now, if you want strictly passive returns, this is probably the best vehicle provided you buy quality certs that you are reasonably certain will be redeemed or sell at the tax deed auction. 

Generally speaking, an LLC does not give you tax benefit in the case of holding rental property.

Not saying it's not possible, but this is likely the hangup. buying cash and then cash-out refi is easy and done all day, even with commercial loans, but likely all will want you to carry some liability in some form (skin in the game) that said, I'm just one lender I can't speak for all of them

The pros are that I'm very familiar with finding quality deals.