So if I can follow this model and achieve similar-ish returns with limited amounts of work, I require a greater return than that from real estate.

You can reinvest into sponsored investments or funds that don't require you to go out and personally borrow money at today's rates.As a 1031 accommodator, I'm clearly a fan of exchanging. 

You should put the property under an LLC Your third question is referring to the short term rental loophole, which requires 100 hours and more then anyone else of "material participation".

You could do that, but it is not required and the costs likely outweigh any benefits. 

Do they require annual DSCR tests?

Would be interested in the real estate side of things of course but I know there are other requirements connected with the medical side of it.

Too many people want a job with work/life balance, a house in the Hampton's, a Maybach, and the ability to binge watch Netflix every night and weekend. 

We require a 550+ credit score as well as a current job paystub or a co-signer who meets these requirements.

I agree that if you are going to require a second check that you should pay for it. 

Best to contact a qualified 1031 intermediary for exact rental requirements on the named (new) exchange property.