I've had a long career in community development and have a lot of bank contacts that would likely be interested in investing, but I'd need to prove the concept first with an initial fund (there are also a lot of other community development tools that could be leveraged to maximize and scale this).

It sounds like you have an un-permitted unit, which is essentially always a risk since there has been no notice to the AHJ that it exists and they can therefore initiate a code case to have it removed in most cases.

My initial interest in out-of-state investing stems from the high cost of multifamily properties in New York and the state’s renter-friendly laws.

Once I've completed these initial projects and built up some capital, my long-term goal is to transition into buy-and-hold investments in potentially more affordable markets to maximize cash flow and scale up.Right now, I'm particularly interested in investing locally here in the Seattle metro area.

Although the tenant initiated the payment on 12/31/2024, the funds didn’t reach your account until 1/6/2025, making it 2025 income.

With probate and prefreclosure it is particularly important how recent your leads list is to the actual initiation  of the probate and preforeclosure case/recording. 

This is a strategy that is used at the onset when the property gets purchased initially from the wholesaler.

Could seller finance (not recommended) to reduce initial burden and spread it out over time

If I have several options, I would prefer a HELOC with no initial draw requirements (i.e. to establish a literal line of credit that I have no specific short term plans to use), i.e. not something like the better.com HELOC. 

That means they have hauled in over $2.6MM just in initial setup fees.