You know full well there is a distinct difference between doubling cash flow and buying cash flow.

Note that "bird dog"-ing is illegal in some states, including Illinois.Wholesaling of real estate is considered illegal by the courts in some states where the distinction between marketing a contract and marketing a property has been blurred by the wholesaler's marketing tactics.

That is a somewhat important distinction from what most people consider a "conventional" loan because it will be at less favorable rate and terms than a 1st.

If it was on the rolls for 800k, your taxable value would be 800k(Somewhat less than a 25% reduction).Be very aware however that even simple tax laws can become complex because different ones apply in different circumstances.

My company loaned funds to a buyer and now the buyer would like to give back the property due to special circumstances.

You can only get 1 FHA loan, unless you have some exceptional circumstance such as having to move out of the area for work.What seems more important to me than low $ down is buying for a great price.

And they started out great, but life circumstances got in the way.

Since you've already made the decision to invest out of state, you now have the opportunity to do so in any market you choose and aren't constrained by personal factors or circumstances. 

I'm already pretty clear on the fact I made a poor decision, so now I'm trying to have a thought-out strategy going forward considering the circumstance. 

But homestead/non-homestead is an important distinction, also if agricultural use or not....all factoring into a homeowner's right of redemption.