Your PM can run their business however they want.

Keeping your budget under $400K is reasonable, but definitely run the numbers on both rental scenarios to make sure each cash flows.

Have you "run the numbers" more than you shared in your post?

If you mean, can you get in good with some gov't program that favor you in acquiring and fixing up run down housing and make it affordable living for people in the community? 

Either model takes a lot of commitment to run successfully.

You'll have to run those numbers to see if it makes sense.

Wholesaling is just like any other business; it takes time to build systems and processes to run a profitable operation.

If everything else looks good, would this make you run?

I’ve had clients pay $100k for a sewer line though (commercial properties, complicated lines running under parking lots, sidewalks, landscaping and the bid includes replacing the landscaping too, etc. or requiring a permit from the city to close off the road for the day with traffic control, etc.).

Run!!