Seems like he either didn't go to jail or got out quickly, which indicates he isn't high risk.

If all four conditions are well met, e.g. its close to Center City with good transportation (public or otherwise), pricing is steady or rising, permits are constant/persistent (indicating still room to grow), and rents are solid, if improving, and the inventory moves quickly -- you have a good neighborhood with long term growth.Would love to hear other investors thoughts on this -- these are just my very inexperienced thoughts.

The Cole Memo from 2011 indicates that regardless of local laws, the Feds may enforce Federal law but the Cole Memo also outlines the Feds resources are limited and indicates they should be directed towards "illegal" activities that fund organized crime.

I believe that some overriding indicators for success is attention to detail, ability / willingness to learn and listening to the experience of others.

All utils are in tenants names, and rent rolls indicate they're decent, blue collar tenants.I offered $120K cash.

However putting a time pressure on a purchaser typically indicates they are not comfortable enough in the merits of their program that it can stand up to further scrutiny.  

Depending on where you live, even signing a purchase contract to then wholesale the property could obligate your spouse to the contract, and also give him rights to 1/2 of the gain from the wholesale activity.Although you indicated you are not seeking legal advice, my advice would be to get some before you embark on this activity. 

This will have their full legal name, address and EIN.If they check a box indicating that they are a corporation, then you do not have to send them a 1099, but it does not hurt anything to do so and I always do it anyways.LLCs, Sole Proprietors and pretty much anybody other than an S or C Corporation should get a 1099.

What may be of interest here is that many banks have policies indicating what they can accept for an REO property.

@Drew PoniewazAs George indicated, location is generally not the primary deciding factor when selecting a provider for a self-directed IRA or 401k based retirement plan.This is a very specialty field, with a handful of providers.There are about 3-4 dozen companies that act as custodians, basically processing the investments you direct them to execute on behalf of your IRA account.