On the other, reduce my return expectations knowing that I will be putting in less time than someone who self manages and I will be using that time to pursue other investments. 

Later, when you find a deal worth pursuing, you can re-advance the funds from your secured LoC.

Wholesaling, you are going to be spending a lot of time building a buyers list, pursuing leads, buying lists, direct mail, cold calls and possibly door knocking to find off-market homes to get under contract, and then sell your equitable interest in that contract for $5000 to $10,000, depending on your market.Multi-family, you need to look at what you can afford, where you can raise money, an that will determine how many doors you are going to get (a duplex, fourplex, 8 unit, 24 unit..etc.). 

@Patrick Philip The standard contract mtg contingencyrequires the buyer to properly pursue the loan and get turned down, not simply just walk away.....I’d refuse to release the EM.  

Issues such as this are typically resolved by either removing the encroachment, buying the affected land, or pursuing a quiet title action (if there are grounds for it).

@Michael Newman ideally your W-2 job would serve dual purposes, both focused on your passion... 1) build capital and establish credit worthiness with which to pursue your passion, and 2) give you experience in a career you're passionate about. 

@Bob Johnson If you are still pursuing and want a contact of mine who I have had discussions about building ADU's on existing properties I am happy to share. 

I've joined the local REIA, created an LLC, and am thirsty to learn all I can about the aspects of real estate, deal structuring, and how to analyze and take advantage of situations and opportunities as they present themselves.I'm focusing on generating passive income for our family, and pursuing a level of financial freedoms. 

Keep asking questions and pursuing different avenues.

If after closing documents were signed then in my opinion you may have a legitimate claim to pursue the seller for the funds.