Cate,
Mr. Brazil's and others advice should be heeded. You are trying to move into what is one of the most desireable areas of Maryland. If you are serious about trying to get a property and make a profit you should start thinking outside of the box. The average consumer is going to be your competition for any of the ideas that you have presented so far.
I think to do what you are hoping to do, you need to not be hung up on a traditional mortgage purchase but to start looking for hard money funding or other alternatives and start looking through auctions or properties that will take more than $25,000 to rehab as this will greatly shrink your pool of competition. Once the acquisition and rehab are complete then go the route of refinance into a traditional mortgage. Pinpoint an area that you find acceptable based on your personal family needs and start hunting in that area exclusively.
If you can handle more rural areas and less suburban, look south of Annapolis down MD Route 2, there are potential opportunities there just outside of Davidsonville and father south and east of Annapolis.
