For instance, I recently picked up a duplex in Portland, with 100% debt funding (not super conventional), and the reason I am doing this is for cash flow coverage of overhead (mostly debt) and I am hoping for capital appreciation, so I can refinance/pull out proceeds when my kids entertain the idea of going to college (8 years and counting).

I also think your idea of using the net proceeds for additional investment is a great decision.  

[Please do not bash me on how I should have opened the corporation first, before making the inventory purchase.

I asked on the forums a few weeks ago just to what extent the seller is obligated to proceed once they have signed a contract with me (because the flakeyness of this wholesaler was making me feel nervous about investing any more time or money in a deal that may fall apart), and everyone pretty much said that there's not much I can do if they want to give me my earnest money back and then back out of the deal.

Once your least favorite SFH is sold, then you can use the proceeds to pay-off the $60k loan.

Any tips on how to proceed with this in Connecticut?

Flipping is a very short term financial gain if the proceeds are not used wisely.Franklin

The popularity of the S Corp status is attributable to three factors: (1) Accumulated earnings increase the outside stock basis of the shareholders' stock; (2) An S Corp is free of any threat of a double tax on shareholder distributions or sale and liquidation proceeds; and (3) S status can facilitate income shifting and passive income generation.There are certain limitations and restrictions with an S Corp that can pose serious problems in the planning process.

Proceeds from the disposition of an asset - say you sell a rental property in a few years - are considered capital gains are and taxed accordingly.Note:  If you flip properties then the properties are considered inventory, not capital assets of the business, and all proceeds are treated as income.

So proceed with extreme caution.