I have a list of some questions I want to ask her but I'm wondering if anyone can recommend some sophisticated important questions I could ask her to make myself stand out as someone who knows what they're talking about and sound like I would be a good fit.

I know I need to get the financial statements, pay roll record, tax returns, inventory list from the seller.

But it seems like those friends and family would have to be accredited or "sophisticated" investors to not violate SEC laws.

The issue with the size property you are describing, the owners are more sophisticated and tend to list with a major brokerage firm rather than go off market. 

Your not going to regulate away greed or corruption, you are just going to redirect it through more convoluted avenues making it more sophisticated.

At the same time, my goal is to grow my own portfolio in buy/hold and flipping.My current growth goal is to be able to double my current payroll income with a combination of passive and active income in the next year. 

What I need is capital to speed this up and I was wondering if any of you knowledgeable people out there can suggest some practical (I have a medium level of financial sophistication) way(s) for me to raise money that is realistic for me to do in order to scale this up more quickly.Thank you in advance for your advice.AJ 

Payroll, bookkeeping, etc can mostly be done remotely.Here is a great list of questions to ask a potential accountant:http://www.biggerpockets.com/forums/51/topics/70447-questions-to-ask-a-cpaIf you need help in your search or want to verify something don't hesitate to ask.I have clients worldwide and things are just as easy as I e-mail them, talking on the phone.

I think people try to make real estate investing more sophisticated than it really is.  

You will need to take a "salary" which you will need to pay payroll taxes on.