However, all distributions – whether from original contributions or earnings – are not taxable.

This is a taxable event so be sure to consult with a qualified tax professional.Also, not sure if this would be a realistic for you to buy a property with only $10K.

Others have touched on the fringes of this but its worth calling out explicitly - one major difference between a sale and a HELOC of Cash-Out-Refinance is that a sale is a taxable event, and a refinance or Heloc is not.

(For example, the easiest method I can think of, is it acceptable that one of the partners write a check which is commingled with the funds in the other  partners checking account, or would that count as taxable income for the receiving partner, or entail other pitfalls.)Any input is appreciated. 

Also note, you need 6 months of cash reserves per property.I think your biggest hurdle is the documented income.My experience has been that most companies want to see 2 years of taxable income.

Sounds to me like he either had a really bad year with repairs; however, I also think he might adding in a few extras to bring taxable income down.

The sale will be a taxable transaction, but you'll be able to use the $250/500k exclusion.

The retirement funds can be used without taxes or penalties in this fashion, but the C-Corp will operate in the normal taxable realm.To invest in someone else's business, you could use a self-directed IRA. 

The seller's Schedule E is a good start since sellers usually don't overstate income nor understate expenses on their tax return.I do want to note that the bottom line on a Schedule E is not "profit", it is taxable income/loss.  

You are correct a refi is not a taxable event  It is a loan against equity.