How valuable is that?

Always use a warranty deed to avoid any issues with the tittle insurance when transferring tittle.Also, Ive recently learned Fannie Mae allows transfer of tittle to an LLC without accelerating the note...Fannie updated their servicing guide to state:Unless the previous borrower requests a release of liability, the servicer must process the following exempt transactions without reviewing or approving the terms of the transfer:· A transfer of the property to a limited liability company (LLC), provided that § the mortgage loan was purchased or securitized by Fannie Mae on or after June 1, 2016, and the LLC is controlled by the original borrower or the original borrower owns a majority interest in the LLC, and if the transfer results in a permitted change of occupancy type to an investment property, such change does not violate the security instrument (for example, the 12 month occupancy requirement for a principal residence).

You need to make sure the property is valuable enough to cover not only your investment but the costs to acquire the property. 

Is it legal to collect a valuable as a security hold such as car title? 

The passive income is valuable, but this is always something I look at with small deals.2) That amount sounds high, but the percentage rate of costs is going to be higher on small deals. $795 for an appraisal is SILLY.

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I'm a newbie investor with a FT day job so my time is very valuable.

And have a narrow criteria to best guide them.

Biggerpockets has a very good beginner's guide in their resources section.

Start with the biggerpockets beginner's guide.