This is a big disadvantage to me as we would like to be able to use some of my 457 for living expenses prior to retirement age, yet simultaneously I would like to invest the funds in higher yielding (read self directed) investments. 

Realtors often have no idea of rehab costs so the deals they bring to me are often severely overpriced.

And although cash flow from art isn't steady, it can be very lucrative (at least to me), at any given moment.

A lot of investors overlook the deals/opportunities that are already easily within grasp of their existing portfolio.Your analysis seems apt to me, obviously the 'your time' is hard to quantify - I'm not sure that the jump from 2 to 3 bedroom would enable getting less needy tenants - at least with what we're doing - I think this would actually typically be the reverse if I had to generalize. 

To me that is a relationship worth having.

I have borrowers come to me every day who overlook doing this No Brainer, simple paper credit.Example:   Property Listed at $100,000Negotiate at sales price of $90,000?

It all sounds high to me but I’m here to learn..so it’s something for me to investigate.

To me cash flow and equity gain both provide return.  

In search of my first flipping project, I have been beaten to the punch on 3 occasions now mainly because I believe other investors are finding out about these 'deals' prior to it getting to me or my agent through local wholesalers.

It seems to me my strategy would be appreciation rather than cash flow for this deal.