So it may end up costing you $400k within 30-60 days without any financing options.How do people overcome this when you do your due diligence?

During the due diligence time frame a lot of my conversations with the owner were had over the phone rather than in writing, via email and text. 

There's obviously quite a bit of diligence that comes after such as who the key principles are and their credentials/track record (both balance sheet and experience), the underlying real estate and thesis behind the investment & tax prep and audit procedures but as a general rule of thumb if the investor can't get past the first part which is understanding what they are investing in, passive investing is probably not for that individual. 

Remember, patience and diligence are key as you navigate through the dynamic landscape of real estate.

Your prices may continue to appreciate/inflate in upcoming years, but just be diligent with your assumptions instead of over-indexing on historic performance. 

They are able to rent property that is lower income housing, because otherwise the property would be vacant, or better housing where the landlord hasn’t completed a thorough due diligence either because the landlord left the due diligence to the leasing broker, or doesn’t know how to go beyond a $15 “tenant report”. or the property is sitting vacant and the landlord decides to “take a chance”.  

You can also find a lot of wholesalers on FB groups but as always it's important to do your due diligence. 

I am puzzled how people were able to complete proper due diligence that quickly.  

You Open Escrow, deposit your Earnest Money Deposit and your due diligence period starts (unless otherwise written into the contract). 

I spent the last almost 3 years doing my due diligence learning the lay of the land.