@Dan Steele, This strategy is what we call a diversification exchange, which is when you sell a large investment property and acquire multiple smaller investment properties in a 1031 exchange.

@Michael C berry jr Defer Capital Gains Taxes with a 1031 ExchangeA Delaware Statutory Trust (DST) can serve as a passive replacement property solution—offering potential income, diversification, and relief from active property management.

You’ve already defined a clear strategy, which puts you ahead of most new investors.If you're open to investing outside Texas for better returns or diversification, here are some landlord-friendly, investor-friendly markets with potential for your target cash-on-cash return:Midwest:Indianapolis, IN - Strong rents, low property taxes, lots of solid PMsMany SFHs trade below replacement costCleveland, OH - Low purchase prices = higher CoCBe selective about neighborhoods and PMsSoutheast:Birmingham, AL - Cash-flow rich, very landlord-friendly lawsStrong PM options + below market deals still availableColumbia, SC - Military + student tenant base, lower entry pointsAppreciation potential and steady rental demandTips to Hit Your Return Goals:Work With Investor-Friendly AgentsFind ones who know how to spot value-add potential or off-market dealsVet Property Managers EarlyThey’ll tell you realistic rent numbers and where to avoidUse Deal Analysis ToolsA simple spreadsheet or calculator like the BiggerPockets Rental Property Calculator helps you keep emotions out of itPlug in real taxes, insurance, maintenance, vacancy, and PM feesLook at Light Value-Add OpportunitiesCosmetic upgrades ($5K–$10K) can bump ARV and rent, and still be manageable for a first-timerKnow Your Exit Strategy:Will you hold long-term, 1031 into larger properties, or refinance in 2–3 years?

I'm personally not a fan of investing in individual deals because of the single investment risk / lack of diversification. ( Other investors will disagree and are fine with it).

Depending on your investable assets, placing $300k into a single loan might be lacking in diversification.  

Is it the diversification?

If I were in your shoes with $440,000 to reinvest, I’d be thinking diversification and scalability.

This ability to absorb extreme events is due to things other than my cash flow (diversification).if I offered $10 for rolling a 6 on a 6 sided die, but you had to pay me $1 per roll, you likely would be willing to do this as long as I was willing to do it even though your chance of winning on any one roll is one out of 6.  

.• Geographic diversification?

.* Lower entry cost per door, allowing diversification.* Turnkey options available - professionally managed and renovated properties that let you be hands-off.* Great tax advantages and long-term growth potential.