They are Accredited and I am not, but qualify as 'Sophisticated'.

Most sellers will not touch a third party note, but there are some more sophisticated sellers and brokers that will do so. 

My cost to remodel a bathroom with my worker's sales commission, overhead including workers comp, general liability, matching payroll taxes, fuel, permits, etc is about $12,000 to $14,000 and I won't do a remodel for less than $18,000.About 15 years ago, I told a friend i would remodel a bathroom for my cost of $6500.

My question is, what, in the experience of you more sophisticated investors is the best strategy for my first investment?

Most sophisticated buyers will understand. 3.

How about dispersing funds (i.e. payroll, compensation, etc.)?

They only look at their back of the napkin calculations of what they pay a PMC, assuming it's 100% profit, because they NEVER consider what expenses a PMC has.Since you like to crunch numbers, why don't you calculate how much it would cost for YOU to hire people to do the following:Inspect a property to make sure it's ready to marketTake marketing picsPublish and refresh for rent adsTake all the phone calls from adsSchedule showingsChase applications, process & screenGet deposits and sign leasesCollect rents, chase delinquencies & evictionsHandle maintenance requests, which are never handled fast enough for tenants, or cheap enough for ownersChase tenants for lease renewalsCoordinate MoveOuts, damage charges against security depositsGet RentReady bids to owner's satisfactionFollow up with maintenance to make sure done on time and done rightStart the cycle all over againProvide accounting services for all of the above, including owner reports and payments, annual 1099's, etc.Don't forget to factor in payroll taxes, employee benefits, company office space cost, company insurance, equipment, phones, etc.Once you do all that, you'll quickly find that PMC's are NOT making more than owners.FYI - this is why investors should always factor in 10% PMC Fees, 10% Vacancy and 10% Maintenance when running numbers on a potential rental purchase.

Also added back are personal expenses paid by the company - health and life insurance, 401K, that "business meeting" you had in Hawaii, non-working family members on the payroll, etc.These combine to create a number called SDE, or Seller's Discretionary Earnings. 

The consensus forecast is for a gain of 700,000 nonfarm payrolls (after a very disappointing 266,000 in April).

You could potentially deduct full state taxes in your business.You can deduct employer portion of payroll taxes(FICA) in your business but not at the individual level.