I made a good amount of money last year, but I took 3 months off in the summer, so my self-employed income declined from the year before.

For example, when the stock market has a major decline, do you immediately go buy more homes?

Since you're out of town and cant drive by the property then I'll ask if you want to make an offer "subject-to interior inspection" if you decline then thats where this transaction ends and I wait until you find another one you like.

The supply is at 2.2 months and slow declining. 

If the vendor does not want an inspection, they should have declined the offer or countered.You could have your agent muse to the vendor that if they do not wish for an inspection, then you could offer 20-30% less and remove the contingency ;-)

She declined and explained that her client is an investor too and would flip this one if it were profitable.

Take Lima for example, Population growth has been in decline for years.

I called a friend who is a private lender and he said he can try to salvage the deal so we tried to move this deal over to his bank before The Bank’s underwriting could officially decline it.Thankfully everything went well and the deal was officially transferred over to the private lender without an official decline notice from The Bank.

Just read a realtor.com article about metros with declining home prices, one of which was austin tx.

History will be on your side, as long as you are wealthy enough not to care about cash flow or the sharp declines in value that might happen (only to recover) during the time period you hold your asset.