My management company doesn't have that minimum because of deferred maintenance and tenant neglect.  

As far as direct answer to your question, I would defer it to a real estate attorney or Title Company to opine. 

As I see it, here are the options:1- get a full-time job in the new town (but I won't have a 2-year history with it - so might not work)2- enroll in school full-time in the new place, loans go into deferment status (I read this was a loophole, and I do like the idea of continuing my education), hopefully qualify for FHA or FHA 203k3- go conventional with less expensive property (keep my job in CA and hire a property manager)4- quit my job, purchase a small motel using SBA 10% down loan and live in the manager's unit5- suck it up and stay in CA, use my salary to qualify for a property here (but down payment is then a hurdle)The properties I'm looking at in AL, FL, GA are all in the sub-$250k, many would pay for themselves plus provide $700-$1000 monthly cashflow after all expenses.

This should cover most of the nonsense repairs.In the past, I have push back from tenants on this, saying when the move in, they can't be responsible for repairs that's deferred maintenance.

So I was thinking about note investing as the 401k will defer all the taxes. 

Sounds to me that the repair cost would not justify deferring a new fridge, but I will find actual $ tomorrow...

By providing comfortable, secure homes for my tenants I am able to attract good tenants (that do not trash out the place), who pay market rates and thus maximize my ROI, and by maintaining our properties we avoid costly deferred maintenance issues.

Moving your portfolio tax deferred at will until you buy a really nice replacement property that you convert into your primary residence after satisfying the intent thresh hold of rev proc 2008-16.  

The remainder of your farm then goes into your 1031 and you can use it tax deferred to buy residential rentals.  

Your Mortgage Interest and your HELOC Interest will be deductible on your Schedule E for Rental property.You will also get Depreciation as a business expense.Of course, if you never intend on selling your property but just renting it out, you will not need to worry about Capital Gains.If in the future you do wind up wanting to buy another Investment Property, you can do something called a 1031 Exchange which allows you to defer the Tax on the Sale of your current Investment Property onto the new Investment Property.