Additionally, have a clear budget, factoring in potential repair costs, and ensure you understand the rules about earnest money deposits and closing deadlines.LLC for Real Estate Investing: Forming an LLC for rental properties can offer liability protection and may provide tax advantages, though the tax benefits are non-existence for rentals.

So it was managing a risk rather than for profit.I’ll defer to others on mortgage paydown versus investing, other than to say that you may want to consider how far towards your next house / investment property deposit you are with the money instead of recast / investing.James 

to me in areas that are big wholesaling markets lots of activity how are you going to break into this and offer your 1k deposit to a wholesaler.. for a fee and how much can you make..

The problem is that they do not usually give this to new people and/or people that do not have big amounts deposited into their accounts.I'm also CT based. 

3. what type of deposit / reserves can you provide in case the monthly rents you receive do not cover the rent you pay me?

If you're living in it now, you'll probably be required to have a signed lease in place as well as proof that first month's rent/security deposit were collected in order to get a DSCR loan (they're business purpose loans and don't allow owner occupancy).

Ask them if you deposit say $250k with them as MM or CD with them having control over it.  

@Ben Dao,The way around that is to arrange to have your paycheck direct deposited into your line of credit.

I would be surprised if there weren't notices given to both the defaulting End Buyer (You're in default, you must close by X date or we're forfeiting your deposit) as well as the escrow agent (Buyer defaulted, see contract Earnest Money paragraph regarding release) prior to that actually occurring.

Consider all the things that could go wrong and see if the lease addresses them: unauthorized pets or tenants, early termination, security deposit, lease violations, late rent, eviction, lawn maintenance, parking, etc.5.