More people equals more deals.

w@Kevin Siedlecki very correctly pointed out that you moving into a backyard shed would be a likely zoning violation (which is not criminal -but could lead to a fine if found out, then warned and warnings are ignored), but that would not dissuade me if shed living equaled saving money.  

Hey @Brad WeaverJust my opinion, not a recommendation or telling you what to do, but all things being equal and you have reliable market data, you can take advantage of both.

My question is, does it make sense to buy an "already" rehabbed property or just rehab a distressed property with an after rehab value equal to the "already" rehabbed home?

Implement a non-refundable reservation deposit equal to the security deposit amount and due at the time the lease is signed.  

You and your private investors are making a 20% down payment (for illustration purposes).If this were an equal joint venture with proportional (pari-passu) return of capital, you would own 5% (your $50k divided by the total $1 million down payment) and the private investors would own 95% ($950k divided by the total $1 million down payment).  

One key thing is all 401k plans are not created equal.  

Additional info:primary 1031 exchange rules and requirements include: 1) same taxpayer: the taxpayer who sells is the taxpayer who buys, 2) property identification within 45 calendar days post closing of the first property, 3) purchase of the replacement property within 180 calendar days, 4) trading up: the price of the replacement property is equal to or greater than the old or relinquished property, 5) hold time supports the intent to hold for investment, and 6) related party transaction regulations. 

Not all insurance is created equal!

Now these are the options lets paint a little picture... when it comes to market investing, holding for a long time no matter the risk/reward of the stock, usually equalizes the return because over a longer holding period the ROE usually ends up in the positive.