It is an important distinction, though.

The distinction is between acceptable and not acceptable behaviour.

In Utah, there isn't a distinction and we're pretty landlord friendly.

As for legal differences, if you use an LLC I recommend a manager managed rather than member managed (if your State makes that distinction).

And like you said, depends on the category of real estate we are discussing, there being a major distinction as far as "cash deals" (even with 1031 money) on the much higher end purchases.

There are those who will also say that wholesaling is illegal for the same reason however I do not believe that to be true.The distinction I make between the two is whether you have the property under contract (wholesaling) or not (Bird Dogging)  Bird dogging is always illegal.

Just want to get a flavor of what I should expect.

Fannie is pretty crystal clear about this distinction. 

It WOULD have worked for your BRRRR goal if you already had 20%+ equity in the property before requesting the extra $60k (either by putting 20%+ down as a deposit, or/and buying it at a 20%+ genuine discount to begin with).The subject of "cash flow" (as distinct from "cash out") is a separate issue, which hasn't yet been discussed here.

Make a clear distinction between your two roles.... landlord and neighbor.