If it's smart, I would also consider an 80/10/10 scenario with a piggy-back loan to help mitigate having to pay PMI.Investment-wise, I think the smartest thing to do is get land and put a modular home on it.

It's those maniacs that buy homes cash via quit claim deed off of craigslist that really get screwed.Make sure your property manager is a licensed real estate brokerage.Understand you can not eliminate all risk, only mitigate it.

The real question is one only you can answer - how much do you want to invest to mitigate risk?

In my opinion you should always stay away from anything that you consider extremely high risk unless you can mitigate the circumstance to reduce your risk to moderate or low; insurance, partners, cost etc . 2cents.

A key component to real estate is risk mitigation, I do not feel comfortable assuming the risk that my tenants be responsible for the AC when I'm footing the bill. 

In most areas, the landlord needs to attempt to mitigate their losses, so they can’t just leave your place empty and collect rent from you for months on end.

Personally, I would set things up by the book to mitigate potential loss/risk.

He completed it and I paid him the remainder.Before I paid him/or even hired him I made sure his LLC was legit, that I knew where he lived/ran his business from and that he was bonded through the state.It does seem to be a risk you take but so long as they have great reviews and are in good standing with the state, you mitigate the risk somewhat.

Have you figured out ways to mitigate that?

In Houston or just about anywhere in Texas if the a/c goes out, you better replace it pretty darn quick.There are ways to mitigate the unexpected, but you will never be 100% covered.