I would take out the 401K loan towards the downpayment.If you sell stock, you have to pay taxes - You mentioned the 15% federal capital gains tax rate(if you are not in the top bracket, otherwise its 20%).You may also be subject to the 3.8  Net Investment Income Tax. 

We concentrate on the subject property and the subject property only  I mean you start still listing documents - sure, vacant means no lease but plenty of DSCR Loans require leases / STR history. 

Even if you create a non-CA LLC, if you are managing the business from California, you will likely be deemed to be "doing business" in California and therefore likely subject to CA taxes.

-Self-Employment Tax: While you anticipate the net gain to be zero after expenses and depreciation, any net income would be subject to self-employment tax, which can be significant.

OPTION: There's a real knowledgeable member Ken that posts about Subject-To deals that you might want to connect with and even pay him to mentor you.

I have a house in TX that I own subject to.

This is a question for everyone:When looking to work with someone in real estate, no matter the subject (agent, contractor, PM, etc), does age matter to you?

Hi Gabe, If you have a history of receiving rental income on other investment properties then you would be able to use the projected rental income on the new subject property on a full documentation loan. 

Hi Eddie, One strategy we've used on land deals is opening contact on the dirt subject to building approvals.

Would like to add some value for “subject to improvement” appraisal to pull equity.