You can collect the money in many ways, I have tenants pay using secure ACH transfers using apartments.comI would declare this income because later on you may need the documented income to qualify for loans etc.

One Fidelity rep says this account cannot be used to do ACH transfers, so I cannot use it to take rental payments from  my property manager.

They needed 3-5 business days to review and approve my wire transfer request that was just two pages long.Now SenseFinancial helped me restate the 401k plan and have no custodians.

The water bill can be transferred to the tenant's name.

Keri - you may also want to check into Fidelity - they have great bank account options - both business and personal - with $0 min, $0 fees including no wire transfer fee and no limit on the amount of money you can transfer. 

Many investors use a general rule of thumb for midterm rentals that they should earn about 50% more in rents than an equivalent long-term rental (whereas short-term rentals should earn double or 100% more than if the property was utilized as a long-term rental).However, for DSCR lenders, change can be slow and challenging, and many lenders prefer and require more precise qualification measures than rules of thumb.

If rent is not paid physically at a branch (i.e. it is paid online or via bank transfer), the date of payment will be considered the date when funds reach our account.

This was precisely my experience.  

Can the LLC transfer the 1031/DST to the partners in their names as part of the LLC close-out Distribution without triggering any bad things such as income tax or invalid ownership of 1031/DST?

I took on the risk that the plaintiff would take note of the transfer and move to foreclose.