But if it turns out you do have a significant gain, then a 1031 would let you roll that into a new property.

With some hard money lenders (there's one I've done a lot of deals with) that will even roll the points and the closing costs into the loan so you truly have a no money down deal.

If you have good credit and put 10% down, your monthly payment with PMI and taxes rolled in would be about $520/month. 

If it was because of another reason, maybe it makes sense to test the area for 6 months or so and see for your self, this way you will know.

He has a good support system in place including monthly counseling sessions with drug testing.

We have just a couple down there to test things out to see how we like doing the out of state investing thing. 

That would give you more flexibility, but you would have to pay all of the loan costs before even getting into the rehab.It might be worth testing the market as is.

My understanding on wholesaling was that I put a contract on it for say $1.2 and sell it to my investor for $1.3 and either roll my assignment fee into that price and do a simultaneous closing.

The question of real estate financing was brought up almost immediately after the Act and it didn't meet the test.

So, about the only con I see is the course work and open book tests you have to suffer through.