I'll be offering a high interest rate for just the funds being available to me, even though I'll never need to draw a penny of it.

I have had an interest in rental properties for quite some time, but I am nervous and still feel unprepared to own/manage being a high quality landlord.

The problems I see are:Rent is a low percentage of the house value, so not optimal use of this equity/capital.Property taxes are high due to the higher house valueMy costs would be a baseline of $2700+800 = $3500 plus maintenance, unoccupancy, etc. so basically breaking even cash flow for 12 yearsIf/when we sell it, we'll owe capital gains tax since we wouldn't have a "new" house to 1031 into.

I am also thinking about investing out of state since home prices are pretty high in NJ, and it seems finding cash flow is a bit tough around here.

I highly doubt the department of RE in WA would do anything with this.

Very high probability that sometime in the future you will need to put those fees towards the lawyer fees / collections - unplanned turnover, etc., 

I see many people saying oh it is just $100 but as I said it adds up pretty fast and in reality, it is way more than a $100 difference as the price of insurance is going up very high.

As mentioned already I highly recommend keeping up communication with investors to ensure that you are both aligned on the deal.

I think the high-risk tolerance is only going to last another 6 months or so.

I'm actually surprised it hasn't affected tourism more yet but that's probably because it's cheap and so it attracts price conscious tourists, especially in a period of high inflation.