If you added in the cash you should have to protect against contingencies, the actual return goes down (or the risk sykrockets, your choice)- If the $300K properties cashflow, definitely a better bet. 

Mostly people with minimal RE experience are adding a single ADU and they often make that choice based on cash flow without taking into account the negative equity position.  

These are the primary factors that will guide your choice of market and the type of deals you'll pursue out of state.Investing out of state can be tricky.

Yes they can use a realtor of their choice.

Artwork is often personal choice, but you definitely need some stuff there.

So if the LP's have enough cash they simply pay the loan off and own it free and clear.. but the size of the deals are so large raising cash to pay off debt simply is not realistic at all so if the property goes into default your junior position investors find themselves wiped out.Further more thats why a debt fund like Chris has can be a good choice for the very conservative investor..

So, while a direct flight is a convenience, it shouldn't limit your choices.

Cities like Memphis and Columbus often have more affordable properties and good cash flow opportunities, making them popular choices for investors.

After talking with an operator I felt he was a good choice for a tenant and he mad a great offer above market for the apartment so we agreed.In the past I would usually rent my own units and to stay competitive I would keep an eye on the rentals in the area and try to be one step above if I could....This time that was a little tougher as the neighborhood hasn't gotten very trendy. 

So, an area might have been D class 20 years ago and is C class today in terms of what the property condition, crime etc show you BUT if the tenants still stigmatize the area in their mind then mostly D class tenants will be applying there because they have less choices.