It forced me to take inventory of my resources and relationships to grow my business.

@Kevin Foyteck - my opinion is that one's area has some impact on what they invest in, but again just my opinion.  

My only advice: Don't force your first deal to work.

Get with a broker that is willing to train and go at it full force.

Investing 20-25 percent of your own money provides some equity which helps cushion the leverage (in addition to any improvements you make to force appreciation) and it eliminates the need to pay private mortgage insurance.

Seller of the tax consequences of your scheme and how this would impact  his tax position in the future?

How badly does it impact my ability to get loans?

Every market is different, so I would analyze your market to see how it would impact your final sales price.

The $1M cap is an important restriction, but I actually think forcing issuers to have audited financial statements for raises over $500k on their 2nd offering will effectively make the cap $500k for real estate operators.  

In addition to what Jeff said above, make sure you consider the impact of moving water supply/drain lines -- depending on where they are coming from (likely below), you'll need to get access to that location to move things around.