That way, they just get a cut of the profits each month (and share in the risk directly) rather than having some kind of preferred claim to cashflows from the house.Goes without saying, but going into a business venture with friends/family under such an arrangement would require a lot of introspection/discussion/preparation to mitigate potential issues down the road.

Like Ryan Fitzhugh mentioned, beware of flood insurance, get a 4point inspection and a wind mitigation inspection to save your a bunch on insurance.Let me know if you want to talk or I can provide any more info. 

I’d like to find a great property managment company to help with the process but am still unsure if that will mitigate the risk enough.

Focusing on working class neighborhoods with, ideally, multiple income families (2 working spouses / roommates / etc) is one way to mitigate this concern. 

Be smart does not mean do not buy, be smart means understand what all outcomes can be and how you can mitigate them.US Property Prices Fall Further, Weighed Down by Apartments, Offices (costar.com)

How do you mitigate against the potential of a renter that brings a pet(s) with fleas? 

We specialize in providing commercial/primary/government programs that could help mitigate the required downpayment.

By investing in different types of properties, investors can mitigate the impact of market fluctuations and economic downturns.

If you're not familiar with executing on value add strategies or construction or construction management, then maybe stick with turnkey cash flow until you or someone on your team is comfortable and can mitigate the risk of value add

To further mitigate risk, I'd rule out properties with old roofs, old HVACs, old hot water heaters and so forth; your annual expenses should be quite low.