The legal threat could help or hurt depending on the reason she is backing out. 

I'm depending on brokers for deals, but cap rates are crunching.

It will depend on your market and what they're looking for in a home.

There are deals all over depending on what kind of place you want but you have to check the location really well, and I'm not sure how one does that when not local.  

@Mark SpritzWhile a Solo 401k may or may not be a better structure for you based on your situation, the additional benefits (beyond contribution limits and loans) include the following:-No custodial requirement-No need for LLC cost and admin to have checkbook control-Built in Roth-Spousal participation-UDFI exemptionsThe cost comparison depends on what providers you are looking at for each.

You might be able to find a private/HML, depending on your bio, to fund part of that downpayment but not all and not cheaply.

Which will be best for you will depend on your specific situation and goals.The advantage of using the retirement plan to invest in real estate is that you will have access to the full amount of your retirement capital and any growth through cash flow and appreciation will be tax deferred.  

Depending on a given area it may be difficult to find contractors. 

It really depends on what you are looking for and the type of investment that would be best for you, given your current investment goals, tax needs, etc.  

If you mean to legally acquire the property after the tax sale that depends on the rules in the state you are investing.