NONE of the money raised from the auction of a 2nd goes toward the payment of the 1st (that is why they call it "subject to the first")4.

They all cash flow and are easy to manage (so far).

Assuming you purchased in your IRA for cash as most do, then there's nothing to deduct or depreciate because the income is non-taxable inside the IRA already.

A common strategy I see with diversification exchanges, is that the investor will purchase the first property cash and the second with a mortgage.

Simple answer - yes you can alter your funding source after putting it under agreement if you chose to use a hard money lender instead - i would just communicate with seller that hey I was going to use cash (assuming you have it from your heloc) and instead will finance some of it but let them know its not contingent on financing.

Just ask the owner what are you going to do with the money if you sell for cash??

Even the funding alone is easier since you now have a cash flowing property that can help you fund your seed money faster. 

So the problem is you wont be able to source the down payment as coming from the seller (most likely), but you can certainly add as many junior lienholders as you like, after the fact.

that's $100K+ in cash PLUS a solid plan to achieve for that return. 

Purchase price: $90,000 Cash invested: $60,000 Buy and hold that I still have to this date.