And the rest of the gain will be deferred in the 1031 exchange.

I recommend you go visit a few times to network with local investors or find an investor friendly agent so you can gain local market knowledge, find off market deals and for things such as showings, picture taking or getting accurate comps.

The absolute best way to avoid taxes is not earn income.  

What should I keep in mind to ensure I'm approaching it the right way?

Steps: you go under contact with the owner of the property, you assign the purchase and sale agreement to the end buyer, the end buyer closes, and you get paid the difference between the agreed-upon price between you and the owner and the intended purchase price of the end buyer. 

Also the ability to repay -  your source of income. 

Sounds like the person knew what was going on with their credit report as they have filed reports in the past. 

Is anyone still active in the Houston Area?

But, the self-sufficiency test for FHA loans can be really difficult in SF, meaning that the market rent from units you will not occupy must be sufficient to pay for the mortgage payment. 

I made some really good connections and now the rest is history.