I can also just withdrawal the contribution amount and avoid the penalty and tax.

I see long-term buy and hold as a wealth building tool (albeit slow), while flips provide a tidy sum (if successful) in a short time. 

Using "the cash flow to pay down their respective mortgages" will be VERY slow in the case of Turnkeys, especially because you're already up for an extra layer of costs. 

I'm sure I am not the only one that has slow, unproductive weeks.

Slow and steady wins the race.... or fast and steady... either way you have to get started.

Withdraw it and use it as a down payment?

As of late I have become a bit jaded with the business, specifically dealing with architects and clients, which is a major source of inefficiency. e.g when a simple design decision takes over a week to make it tends to slow things down a bit:) I do love building and it is a satisfying creative outlet for me.

Lot's of people seem to be predicting a market slow down sometime soon in the Bay Area, so take that into consideration!

The demand is up because everyone just about stopped building for years, so now we have a housing shortages as the number of people entering the market due to age and income continue to grow even tho we stopped adding houses for a few years while we recovered from the housing crash.The real concern is slow or no growth in the economy or global economy right now, stagnation.

 $42,000 is not all that bad, I see some comps where other investors are buying from providers I have never heard of in the mid 50's ' low 60's.