I am very inclined to invest out of state, but I keep hearing that for the first one, it’s best to do it locally so I can be within driving distance from the property.

I would be inclined to refi several things if that were the case for me.I'm just old and lazy and my market is tough.

I will also have a deposit on hand of $1,250 (one month), so that can also protect me against pet damage on move out.I am inclined to go with the people with pets, but I just finished this remodel and it looks nice, so I might be having an emotional reaction to animals messing it up?

If you don't have the time, inclination or desire to do this, it may not be the right choice for you.

And furthermore, if that is even a path I would travel, instead of just finding several great sponsors and expand more into passive investing, instead of my natural inclination to want to be hands on. 

I'd be inclined to fix up and sell all of that and invest in an area where they can get an actual return either by buying MF properties or doing some homework on syndications and going with a couple of those.

Could entice more people to create content than would otherwise be inclined to without incentive.

If the deferred tax burden isn't dissolved or reduced over a length of time, I'm inclined to buy another rental, live in it for 2 of 5 years, rent it for 3, then sell it tax-free.

I'd be inclined to simply pay your contractor as long as your financing situation allows you to do that. 

Passive investing through crowdfunding/syndication is awesome for someone who either already has a good chunk of money, or someone who doesn't have the time, ability or inclination to own real estate directly.