Then when the good deal comes along you exercise your line of credit and the cash goes into a bank account, use the bank account as proof of funds and get write the cash offer.  

In fact, I'd argue that you'll obtain better business education by investing out-of-state because this puts you into a business management role rather than a worker bee role.

Searching for a decent multifamily has become a fruitless exercise.

This should be a relatively quick exercise.

Your parenthetical reads to me like you don't want to just borrow the money, but your description doesn't look like your friend would play a management role.  

Try not to tie-in substantial lessee improvements with the option exercise. 5.

I have been trying to think through this mental exercise a fair bit lately.

This is what I envision:Step 1: Find Property worth buyingStep 2: get financing for said project and do rehab to create equity ( 3 year term)Step 3: Find tenants that want to do a "rent to own" situation on a 2 year lease termStep 4: screen tenants and collect "money down/option payment" (somewhere in the realm of $5,000 and negotiate purchase price and get contract signed.Step 5: Hold the note for the 2 years and collect rent payments until tenant is ready to exercise, if they don't then sell the property for the appreciated value straight up and collect the equity.does this sound like a valid strategy, and if so can anyone provide me any insights into any potential pitfalls?  

@Rod Desinord@Jake StenzianoHi rodI think fear plays a big role.  

I have an Electrical Engineering degree but haven't designed anything in over 9 years having moved into more of a project management role.