I would use hard money on the deal that’s the one in 1000 where the money is just so profitable that it makes sense but it would have to be a huge profit to be worth the gamble.  

Either way you want to make sure your insurance provider is on board, because if they would deny your claim anyway were something to happen you might as well not pay the premium and gamble your life savings.

This is why wholesaling doesn't work and why the stock market is an awful gamble.

In every world this is a mathematically inferior situation to paying less for the property, unless you are willing to gamble that the 10-40k is a drop in the bucket because the place is going to explode upwards in value...?

Unpermitted may not be a huge deal in some cases, but when it comes to egress and life safety issues you're gambling more than I closed off the dining room and made an extra bedroom.

So unless you are willing to gamble with your savings, you do not save much time buying turnkey.

You are correct that market appreciation isn't a blind gamble, but it is speculative.

So essentially I am stuck either investing out of the state (20% down) OR gambling with rent increasing (possibly negative cash flow for a bit). 

Your stock market losses offset your stock market gains, your gambling losses offset your gambling wins, etc. 

I'd rather not spam the thread replying to everyone individually, haha.