The 401k is a valuable asset but its my thought that I can use this asset to further increase my portfolio by putting that money to better use.

Cheap money and low rates produce euphoria, which increases flow of money to an asset, which pushes up the price to uninvestable levels.I think it's going to get worse than better in the short term.Gino

With the exception of some small markets in the Southeast, places like Cleveland are the only major metro areas where a regular investor can find cash-flowing assets with a mix of appreciation. 

Seller of said property is not willing to do terms.I go forth into the MLS or elsewhere and find a seller on any type of property willing to do the terms I want AND is ok with me selling their property and substitute the collateral with another real estate asset of same/more value.

About me, most of my assets are RE but in another market so I would be diversifying in that market.Potential for appreciation is very uncertain: prices have risen a lot locally lately and are as high as they have ever been, and it’s unlikely higher prices would be affordable by locals.

Is that process too complicated, yes, but there is nothing in this decision that will prevent a tax sale purchaser in MD from reselling at a profit after obtaining the property by foreclosing the right of redemption.

Do you need cash flow from it for income or will light to no cash flow work if you can groundswell appreciation on a good asset?

It may not appear this way on the surface but you are going to come out ahead by focusing on purchasing fewer but quality assets rather than becoming a door accumulator.

Look at all the above and more.History, experience, assets, ability to pay, collateral, references, credit score, etc.The more the better. 

If this isn't required, then most likely having the GC sign a completion guarantee to ensure the project gets finished and lender is not stuck with a partially complete asset is the case.