While prices have risen in the last few years, I do still see properties listed that look interesting.With regards to market selection, that will really depend on what it is you are looking for with regards to entry price of property, location (jobs & demand) as well as ease of management.Best of luck,John

I can absolutely demand a tenant be removed prior to closing.

Is there a way to legally separate that or demand a separation? 

I would think a luxury house would demand a higher quality set of marketing tools.Do you think I'd be able to make something of this, or is there not really a market for it and would I just be wasting my time?

Now local markets are either in balance or more buyers than sellers.When capital was scarce, cash could demand a significant discount.

If anything, I would think those may have a greater demand as students would prefer (I know I was this way) to live in a house with a driveway and a backyard for barbecuing (as well as other social activities students seem prone to partake in).  

Agree with @David Panzera but remind you we can not demand a specific form of payment. 

The ideal investment carries a reliable source of income, unlikely competition in the market, little governmental or functional restrictions, a very low management burden and stable demand as well as other factors.

Sometimes the second appraisal will come in higher than the first, especially if the first appraiser was inexperienced or made mistakes.If your loan is a conventional loan, then it is subject to the rules of the home valuation code   Barb Torres, an accredited senior appraiser says, "As soon as the parties find an appraiser is coming out who is not familiar with the local market, they have every right to contact the lender (preferably in writing) to DEMAND a local appraiser be used."

NPN investors are looking for outsized returns and will demand a return on top of their purchase price and expenses.