Not quite sure what you are asking but - unlike used cars - I am unaware of any prohibition of how many houses you can live in and sell at a profit.

He was not a cash buyer and he was assigning these contracts for a profit.

Which in turn is why private/hml charge more - they don't have the ability to sell that $500k mortgage for $505k or $510k, so the only profit is the points/rate they charge you. 

The idea of having houses and building ownership turn enough of a profit to live off of, sounds too good to be true. 

R2O's and Contract for Deeds are some of the most profitable deals you can do -- if you set them up right.

Luckily, they have a great inspection with no findings.Though not optimal, I decided not to pursue my $50 late fee and the whole issue with my renters breaking the lease by using their deposit as the last month's rent.I'm curious if you all know of a more functional approach to this whole last month's rent and  deposit thing. 

I feel like he could partner up with one his flipper friends, and at least profit from the sale. 

As money  gets more expensive, it will tighten  up the profit  margins  of investors.

Option 2: I have been finding more deals on the more expensive houses in the 250K+ range, i have crunched numbers on a handful of houses in this range come across a good number that have showed positive passive profits in the $200+/month range, but im concerned on these taking up to much of my active income.

I tend to agree with this statement and have been successful in helping companies identify their profit producing activities and then create systems and processes to make those easier.