The catch 22 for me is not knowing whether to do this and pay the higher interest rate for a "just in case" scenario... aka winning bid on an auction property, super quick close..... or go the more traditional route, less risk, lower interest rate.

You need a diverse approach.Realtors, MLS, Craigslist, Zillow etc for people who have already taken the time and money to list their property the traditional ways.Website with good SEO to attract people actively looking for a buyer online - and entering the keyword searches you optimize for.Mail to off-market leads.

They are also usually doing a lot more volume than a traditional owner/operator.

Investors who are unable to get financing from a bank/traditional lender? 

You put down 25% of the purchase price as a down payment and finance the remaining 75% with a traditional mortgage from the bank.

Local traditions dominate. 

On top of that yea the out of state thing was becoming an issue although we were entertaining bringing in a family member as a "credit partner" merely for their residency.We are exploring more traditional mortgages now that would be used to purchase our "2nd home" as long as it will pass appraisal.

For example if you want to roll over 401k pre tax funds, you would obviously want to open a traditional IRA.

Bill Gulley 's example is exactly what I'm talking about, localities seem to differ on what the "tradition" or local laws, or interpretations thereof are about occupancy, which I find silly. 

I glanced over the spreadsheet you made and i think you missed a few key factors. 1) Securities can also be leveraged, granted not anywhere near as high of ratio as RE but it can still be leveraged. 2) Liquidity, you can constantly re balance and fine tune your traditional securities portfolio daily, which allows you increased ability to avoid risk or capitalize on opportunity, essentially minimizing opportunity risk.