I have actually cashed out a lot of my IRA now bc I have so much depreciation from RE that my tax bracket is very low and the taxes to pay on the IRA withdrawal are also pretty much non existent (taking aside the penalty). 

Leveraging existing equity is a solid strategy, but as you pointed out, the numbers have to work.

For southern states, you might want to look at smaller markets in Alabama, Mississippi, or parts of Tennessee and Arkansas where properties are still affordable and cash flow potential exists.

The existing owner has it in a trust but it is not his primary residence. 

They work, live legally, yes there existence is an illegal one but reality is deporting them, separating US born kids, it's a mess and for no real positive because they are decent legal acting people. 

Just want to mention that sometimes it works out better to raze an existing property down to like 2 studs and rebuild around it so that it still is classified as a remodel versus a complete new build. 

Also It seems that in my city this doesn't exist with a duplex, triple etc.. 

Quote from @Sean Gallagher: If there is an existing lease, you must honor it.

You could also buy from an existing landlord that has a section 8 tenant.

Real estate agents in Ohio aren't allowed to lie about receiving other offers that don't exist, but I've seen it happen before.