@Andrew Lax sorry, not quite following what you are asking here - are you asking if you should pay full price for a house?

Obviously wholesalers is a main way but 9 out of 10 times you will need to pay with cash or HM and probably won’t have an inspection or option period.

They are holding funds so they can live in the float as long as possible, probably because they don't have the cash to pay up.

A home equity loan is a fixed interest rate version of the same, whereas I can draw and pay back the line of credit over a period of time, the second mortgage version results in a lump sum with fixed interest rates and fixed payments. 

@Tanjaree TurnerIf you can move it to a self directed ira then you typically don’t pay penaltiesThere are several sdira companies on BP who could provide more information or a simple google search will give you names of many.

I'm wondering if it's worth the crazy labor cost to pay someone to do the work, or if it's a project I could do myself.  

You're investing there, paying taxes, making friends, bringing your friends and hoping to create a safe space for others to visit where the people on the other end of the line live full time. 

If you're paying anyway..might as well get a G Wagon, or in this case a STR out of it. lol Check in with me if you'd like to explore OR, I work with a lot of absentee investors from your region.

To do well in pricey places like Santa Barbara, use what locals know, look into ways to invest, team up with backers, check out how to pay for things, aim for cheap homes, do deep checks on the market, and get to know folks in the area.

Investing time to learn the market will pay great financial rewards to future you.