@Christopher Phillips@Herndon Davis@Calvin OzanickYou guys rock thanks, I think I'm on the right track. 

I'd make sure you have a rock solid legal contract that protects you in every way.   

Interest income is passive in nature and does not have tax implications under UBTI. 

If you're looking for natural appreciation and some cash flow, use the strategy that your friends have suggested.

Unlike wood, this natural product does not need to be re-harvested, thus leaving less of an environmental impact when compared to natural hardwood flooring.CERAMIC AND PORCELAIN1.

I'm in Arkansas near Little Rock AFB. 

My wife and I live in Round Rock, TX a suburb of Austin but I work in Houston during the week, currently I'm using Airbnb for my accommodations.

Not faulting your plan, I still like it too and I hope you rock it!!

I would never manage such properties myself because of all the hassle but I have a great friend who manages in that sector and he is a rock-star and is making my landlord life fairly easy.  

Then call the references and ask about the  quality of their work, and their experience with the workmen.I'd also ask them about the costs involved to demo the lath and plaster and redo it in sheet rock as well as top coat with (probably) knock down spatter (and get a paint and molding (baseboards, windows, etc...) estimate too).Your choice will probably be evident after this.Some states require you to use a lead certified contractor to remove lead paint (special EPA training, special masks and special vacuums, etc...).Good Luck!