It was determined that, historically, when the stock market gets shaky many investors take their funds out put them into more tangible assets like real estate causing less supply in the housing market, causing a bubble.

"The IRS discussed the issue in PLR 9840026 (some citations omitted): The rental of even a single property may constitute a trade or business under various provisions of the Code.

Comparison shopping is the best way to determine that.

If you take cash out (like scenario 1) the IRS sees that as taking profit so that $75K would be taxable.  

I am trying to maximize the use of the house flipping calculator to determine the purchase price.

You may need a Phase 1 audit to determine what course of action is necessary.

I would run some comps against that asking price, ask seller how much equity is in property, and try my best to determine motivation level before worrying about seeing property.

See IRS Publication 598 for more details.Good luck with the deal!

Decide if you are willing to get a fixer upper, and determine if each property is an area you'd be willing to live in.If your wife is willing, pool credit with her to qualify for a bigger loan (yes they need her SSN for that).  

-How do you determine the value of each lot?