Here is my way of investing for meaningful cash flow.For 40+ years in Northern Calif.

I would have the two properties and sit on that for a while until I saved more money to acquire more or accumulated more equity to extract from the investment property? 

With equity I've extracted from the first house I am looking at a 2-bed town house which has the following numbers:Monthly Income: $1095Monthly Cash Flow (income minus expenses): $-310.25Monthly Expenses...Cash on Cash Return...Principal & Interest$800.00Down payment$51,125.00Tax$80.00Closing costs$3,000.00Insurance$56.00Washer dryer$560.00HOA$205.00Paint$1,000.00Utilities$0.00Vacancy$54.75Repairs$50.00Capital Expenditures$50.00Total investment$55,685.00Prop Mgmt$109.50Annual cash flow-$3,723.00Total Expenses$1,405.25% ROI-6.69%However if I factor in the equity that will be built because the mortgage is slowly being paid off then the ROI becomes positive.

I've been scratching my head around what is seemingly a very simple aspect of wholesaling, but I just can't seem to mentally um this hurdle.Pertinent background info: I won't qualify for $600,000 worth of financing in a conventional manner and do not have an investor or pool of investors that will provide me with the "financial backbone" to really make meaningful offers to purchase at or above the aforementioned sales price.  

I am having real trouble growing my prospect list to a large enough size to meaningful (1000+) For Tax Distressed Absentee's.

The theory behind the 10/1 ARM is that for as long as I've owned homes, I've never gone more than 10 years between refinancing (owning now for over 25 years).So we extracted the cash and were in no rush to invest instantly to offset the amount we'd owe with our mortgage AND the HELOC.If you have a mortgage, a HELOC and a mortgage on a rental property and you don't have the property occupied, then you're in really bad shape (IMHO).So what's why we refinanced over the HELOC.  

The downside with these approaches is you do not extract your capital from the property upfront.

Odds are he doesn't have the answers you are trying to extract from him and he feels annoyed with your constant nagging for clarity.   

At 97% LTV it will be challenging to be able to extract any of your initial investment but even if you cannot, you have a RE that is worth significantly more than you paid for it and rents for significantly more than when purchased. 

Let's call the blended rate on the $100,000 in debt 7% (correct me if I'm meaningfully off).