You can use someone else's money, but that person will want interest, fees, equity, or all of the above. 

They may end up being a good team member, friend, and/or ally in the business!

I shipped down my 911 4 s.. those roads are so bad that i had to get cavities replaced and i just sold it while i was there. 

@Liz Ridgway your understanding is correct in that you must sell a material portion (or all) of the real estate activity in order to claim passive losses.

Personally, I wouldn't be overly excited about the numbers on this deal, $150 "positive" cash flow before expenses likely means that you'll be losing on this one over time once expenses are taken into the equation.For what it's worth, I would look at this type of transaction to see if I could fill the property with a long-term lease/option resident and possibly get a higher monthly payment (and offset much or all of the maintenance costs on the resident). 

Rental real estate will shelter some or all the income through depreciation thus not raising your personal AGI.

Also, I believe contract law in AZ states that an oral contract between parties is enforceable.

Paying off some or all of your properties may not make you the most money but it reduces your risk.

This is better than 1031 exchange as you can invest just a part of your gain ( or all gain).

Fixing some or all of the issues boil down to a cost vs. time.