You obviously have savings in real cash flow right there you can save or invest.

Another advantage is you can keep cash in higher yield money markets or t-bills while you are in idle cash.

You don't make enough to pay lawyers, fines or anything else from your cash flow. 

The property will still cash flow with the extra cost of these expenses. 

How could somebody smoke through that much cash that fast.

A good option might be a hard money loan for the front end at high leverage (15, 10, or at most 20% down) and then adding value and pulling out equity via a DSCR cash-out refinances qualified with AirDNA projections. 

It is a little bit out of my niche so my question is what is the best way to get in contact with the homeowner of a distressed property to make a cash offer?

I’d do a cash out refi and use all that cash to buy as many C+ class rentals as you can with 20-25% down.

The cost of make-readies can eat up a year's worth of cash flow.

Your ONLY cost in a rental is the cash you come up with.