There's either something wrong with the unit or the rent amount, or the PM isn't doing their job. 

It ultimately increase your profit margin and accounts for increased risk of something going wrong or costing more.On the other side, it means you could go up to .75% if the property just needs basic basic updating.

Is my title company wrong in saying that the purchase contract has to be changed and security deposit removed from the contract or if not she is obligated to put it on the HUD as it is the only way to guarantee the money?

There are probably just as many things that can go wrong in a renovation and comparably speaking as much financial risk when they do. 

Maybe i'm wrong as I am a newbie but I truly feel giving the lead the opportunity to speak freely to a voicemail and simply asking for their reason for calling they will open up and spill their reason for selling which then will provide me with some great info that will make the call smoother and give me a heads up on how to handle this particular lead.

You can't go wrong with Oahu ownership though.

(By that I mean that previous nine I did pretty much everything wrong; lack of focus, directed effort, working in my business vice on it, etc).

We already have a backup place to live as a gift from my grandparents in case things go wrong or if they pass away we could rent it out for side income, which we are considered very lucky to have.Hopefully the future will be bright for us both.

Then if things take a wrong turn and your return 85-90% they're thanking you for getting so much of the money back as opposed to disinviting you to Thanksgiving :).In a deal like this your investors money is worth just as much as your work so you split the proceeds 50/50.

When I first started out, I used to do out of state investments (i still have a out of state rental), but personally, I felt I was so detached form my investment, my education was fairly limited (nothing wrong with that if you want hands off), but if you're wanting to start a property management company, I would be hands on It's not easy starting up a business being hands off.