What some people are suggesting above is "equity stripping" where you keep your direct equity small in case of lawsuits or other troubles.

You didn't mention property management; are you going to manage it yourself? 

I plan to manage the bookings and do cleaning in between clients, so I will meet the "substantially all" materially participation requirement.

I manage 325 units currently, and there are quite a few scammers out there that use this even to secure an apartment and then never pay.

Our property management company did not accept TurboTenant applications because their screening process is not as thorough as we prefer.

We've had great tenants, a good property management company, and few expenses over the past few years.

By House #4 I figured out I should do fourplexes/duplexes, and managed to get a fourplex with owner-occupant financing.

I found someone a condo in Mount Crested Butte about 6 months ago where the numbers would work to cash flow a little/break even including pricing management into our numbers. - As with most forms of real estate.

8 hours one way and 8 hours back, gas, motel bill, plus two days of my time is a lot of trouble.

I need help finding a property manager who can help me market and rent each room in the house.