2-I work as a contract employee and sometimes other companies pay more for my services.

Please note that you are obligated to pay back their 401k (regardless of the performance of your real estate investment).Per the loan offset rules that went into effect with the 2018 Tax and Job Act: if you leave your job and the loan is current at the time you leave your job but then the loan goes into default because you left your job, you will have until your tax return deadline (including any timely filed extension) to make the loan current by depositing the outstanding balance into an IRA (and thereby avoid the taxes and penalties that would otherwise apply).If you are self-employed with no full-time employees & you can rollover the funds, you could set up a Solo 401k, rollover the funds and take a 401k loan from the Solo 401k.

Unfortunately we realized they cannot be property managers without becoming real estate brokers, which would take four years.The only other option seems to be that Texas law states I can make them W2 employees and then they can do management activities on my behalf. 

The accountant says if I had a business then it would be deductible but since I do not have employees and my investments are passive, and since the investment I made as a result of the trip was a loan (trust deed) there is no allowable deduction.What I will establish for 2019 is the 250 hours in a year.

If you've got consistent enough work it might make sense to hire them on as employees.

@Dave@Dave Foster he knows his stuff!

It reminds me of situations where a person steps down as a manager for company but remains there and a different employee is now a manager and making changes -- effectively an indirect way of saying the past manager was "wrong".

The one with the job (which was verified by me) had enough income to cover income/rent ratio, and the other one had good previous employment history (verified by me as well) but no current earnings.Between then and now the second tenant told me she found a job, so as of now they are both employed (to the best of my knowledge)About a couple of months later, the 1st tenant told me that her work place give their new employees an opportunity to rotate between sites for 3 months at a time, and that she would like to try that, and asks if it will be possible to have someone else stay instead of her for these 3 months during the summer.

I can't say for sure that they are bound to  FOIA as I'm no expert, just a former Gov't employee... 

Please note that you are obligated to pay back their 401k (regardless of the performance of your real estate investment).Per the loan offset rules that went into effect with the 2018 Tax and Job Act: if you leave your job and the loan is current at the time you leave your job but then the loan goes into default because you left your job, you will have until your tax return deadline (including any timely filed extension) to make the loan current by depositing the outstanding balance into an IRA (and thereby avoid the taxes and penalties that would otherwise apply).If you are self-employed with no full-time employees & you can rollover the funds, you could set up a Solo 401k, rollover the funds and take a 401k loan from the Solo 401k.