The only downside for me (besides debt service) is the opportunity cost of not having the money actively invested. 

While appraisers do need to include actives/pendings in their report, a sold comparable will carry primary weight.

We are both searching for avenues to increase our active and passive income in the Denver Metro area.

I learned many things about real estate that I didn't know about, even simple things such as pulling public records of homes and seeing how much a person paid for a property as well as seeing the current year's value assessment of a home.

The assessed value of 2900-R Cranberry Highway is $1,800,000 so Zillow, most likely, is simply adding random numbers to the assessed value. 

The cost is that you need to pay to create an LLC and keep it active yearly.

I''m currently Active duty in Hawaii, contract ends in 2020, love it out here but can't wait to get back home.

I would strongly suggest... before doing ANYTHING else... to try to get the owner to allow you you walk through the property and make a more accurate assessment of the condition of the property.

Do this wrong and the clerk will expect full transfer and recordation taxes based on the assessed value.

Even with a non condo HOA, would expect there to be a paid assessment letter at the closing at a minimum.