Build that Pacific view house yourself or buy the 1.2m house with cash. 

pacific northwest real estate meet up on meetup.com in tacoma, seattle, and kirkland are good ones along with @Tatiana Gershanovich, @Dima Suslikov, @Ryland Taniguchi, @Nghi Le their meetings as well.

Honestly there are so many variables, but assuming relatively upgraded, 3bdrm/2bth can get $3,500/mo. maybe more depending on specific location and appearance - another great area is Pacific Serena - these small 2bdrm twin homes pull in $2,500-$3,000/mo. easily - (http://www.pacific-serena-homes.com/what-just-sold.html) -or- Encinitas Estates - People want to live in Encinitas, so that is always good for business ;) 

I am in the Pacific Northwest, average home price is $350k.

I looked up Rain City's website - I can't seem to find this info on there, do you know if they lend nationally or are they primarily just Washington/Pacific NW?

I am in the process of selecting a new market to send letters too and  really like the pacific northwest. 

AndyAlaska and the pacific northwest are some of the best places i have ever lived.

However, the Pacific North West is where I want to call home.

Depending on what state you are in, research Foremost, USLI and Pacific Specialty.

I mention the neighborhoods because if you are looking to get 1% rule in "A" Neighborhoods ......in San Francisco thing Pacific Heights or the Marina District then you may not get that.