Now, I did notice somewhere there is a reference to new regulations on capitalizing acquisition costs. 

Unfortunately, bank must follow certain regulations and meet global debt service ratio's. 

Since I really don't know much about the railroad industry, the first thing I would do is research what (if any) regulations exist regarding what can be transported via train through residential areas.Not only do you have the concern of kids playing on the tracks, but the potential of derailment with hazardous or flammable materials. 

You can run all the what ifs you like, you can have any opinion you like, but in reality, there are rules and regulations you'll be dealing with, they may not be logical to you or fit with your thinking but that becomes irrelevant in the reality of real estate.

We met a young Engineer who was building/rehabbing out of the immediate London environs & holding them for the required 2 years & then selling to move up into another new build.

I assumed a 10% vacancy rate even though my rental is located in a class A environment.  

(in most markets, your market may be different).Because of the MANY new lending regulations it can be hard to imposable for a buyer to get a owner occupied loan to buy your homes from you when you eventual liquidate. meaning you are selling to cash buyers and investors only.

Rules & regulations of the HOA board- Some may not allow rentals or they have rules regarding rentals.  3.  

The regulators don't like it, examiners don't like it and neither do state and federal entities.

Wholesaling is the sale of the contract buying real estate.Real estate brokers must comply with the provisions of the Real Estate License Act of 2000 and its accompanying regulations or be subject to discipline.