The challenge is that your capital gain significantly exceeds the $250,000.00 (or $500,000.00) tax-free exclusion permitted under the 121 exclusion, and if you sell your property the amount of capital gain that exceeds the 121 exclusion limitation would be painfully taxable.

That's more of a financial limitation, but as I read more, it seems like anything is possible when you find a good deal.

I've heard 8% annualized is common but I guess it all depends.I also can acquire hard money loans but want to limit that if I can and just use private money and personal capital.Any advice is appreciated?

And, yes, I don't want to accuse anyone of wrongdoing before I find out more, but I have a feeling something shady might be going on with the fees and this committee of one...When I was restoring homes in my hometown of Minneapolis the city was cool with drawings on napkins and the permit fees were reasonable.

Cities we are considering include, but are not limited to Pittsburg, Philadelphia, Memphis, Atlanta, Milwaukee, and Riverside County, CA.  

Unless you are a passive / limited partner in your Colorado LLC, CA expects that you are doing business in CA with your Colorado LLC, owning Colorado property just because you as a principal in the company live here (ridiculous I know).  

Since they are successful with their business model, the bank keeps raising the limit on their credit line.This might be a similar option to portfolio lending to start small and eventually grow. 

The mentorship group had limited resources in Austin (they're really based in Houston/Dallas/San Antonio) so when we got involved with our first property, they could only recommend one investor-friendly general contractor, who was also an investor themselves.

Your local community bank will help you with that.With secondary market (FHA or Conventional) mortgages, there are limits to how many you can have.

If a unit barely cash flows at $200 or less, it is probably not a good candidate to cash out unless it's in a rapidly appreciating area OR you have a lot of equity in the unit and can purchase one or more higher cash-flowing units elsewhere, i.e. it can make sense to have that unit zero out if the cash withdrawal results in a significant cash flow increase elsewhere.All of this has to be balanced against your total portfolio risk.