This taxation can occur in real estate in areas of new construction and flipping.

Until the flood insurance market stabilizes, I would avoid purchasing anything where the building is actually in a flood zone unless it's a good enough deal to pay cash and take on the risk of repairs if flooding actually occurs.   

There definitely some hiccups that occured but I kept chugging along.

And God forbid there is one accident either way, there are no shortcuts on IH10/Boerne.

The transformation occurs when someone sticks with buying notes and refining their systems until their portfolio is mostly performing. 

As of now I only am really using my assistant for transaction based work so there would be no additional work that could possibly occur outside of a transaction fee. 

The only way I would except negative cash flow is if there were future events to occur such as rehabbing to increase rental income, property currently 20-30% under market rents, purchasing the property well under market value and its located in an area that has strong appreciation or Amazon is moving one of their new headquarters around the corner.

But the inspector went to his office anyway and it was all taken care of somehow.While it's true you are responsible for all your tax returns, liable for errors on it, by having a CPA on hand allows him to explain what happened when problems occur and save you a lot of grief and even criminal liability at times.What you have, a chain of 1031's could be a challenge taxwise, if you do not know how to properly roll the tax basis for one property to another.

I'd rather mop up a few properties when a downturn occurs.

This is going to be much more involved on the underwriters side, and you may get denied if you have no experience doing anything like this.Regardless, I would probably shoot for the 2nd option, as it'll keep more cash in your pocket, which can be used for handling emergencies that will occur during a project like this