What an investor gives up though is tax bene's and the chance ( well at least proforma wise) that you bought at X cap rate and can sell at Y cap rate and there is a big profit that is added on to your returns. 

A good deal won’t matter if your contractor delays the timeline, eating into profits through holding costs.

Back before I retired, I didn't need any of the cash flow at all so all profit just rolled back into more properties.

While it is possible and can be profitable to invest in small properties out of state, I don't think it's worth your time and effort.

There is only risk/profit exposure calculous.

If you are searching for offmarket, you can network with local wholesalers, and also use something like dealmachine to generate leads.

You will then use the K-1 generated to prepare your tax return. 

Investment Info:

Mobile home note investment investment.

Purchase price: $64,250

Cash invested: $12,000

Sale price: $175,000

We purchased this mortgage note and ended up foreclosing on the proper...

Today, that building generates enough passive income to cover his annual retirement contributions.You mentioned taking the 10% penalty, which I’d only recommend as a last resort.

Look for ways to increase profits but without cutting corners.