They are related, but only to the effect that a larger downpayment increases your cash flow.  

So this makes effective use of your nights and weekends critical. 

Has anyone out there purchased an investment property in a cost effective city while renting in an expensive city (such as Toronto)?

Once you know your What you could sell them for, then you can answer the question of what is the effective ROI based upon current valuation.

How can you possibly do it that cost effectively? 

I just recently started engaging with this forum myself.

You don't know how to wholesale effectively, and you want to virtually wholesale? 

One of the most effective ways to get deals is by following up with a seller two or three months down the road.

If I engage an attorney, I would try to build his fees into the cost of the loan, probably as points on the backend (after flip).One of my worries is that with the added cost of the attorney and with the return I require to satisfy my risk appetite, the rate I can offer them would be uncompetitive (one of them who has a steady income, good DTI  and prime credit score can get fairly competitive (6-8%) rates on an personal unsecured loan).

Due your due diligence and be sure to understand all of the rules before engaging this structure.