They do allow vacation rentals and owners can occupy the unit for a allotted amount of time through the year.

To spend enough to cover the sale price on what would probably be 3 properties if I bought smaller, as I like to buy distressed units, finding 3 deals within the allotted 45 days woukd be a challenge IMO.

I had planned on doing a $300k downpayment for it, getting a mortgage for $200k, and then opening a HELOC (let's say it's $225k allotted)  to buy a cash-flowing multiplex.  

The catch is, after allotting 7% for vacancy, 7% for repairs, and roughly $110/month for property management services - my returns/positive cash flow is next to nothing. 

They are late and now past the grace period allotted by the lease.  

They also have allot of headaches to give if you're not careful .

Is the smarter play to fix and flip properties or to try and wholesale them to be in and out allot quicker?

I think allot of people get stuck at your point, there's a good chance nothing is going to fall into your lap. 

Of the last 3 we bought 2 of them we found from approaching the owners directly, we saved ourselves allot of money by going directly to the title company and cutting out the realtor. 

But the number is probably allot more then what you are currently thinking.