Across the Midwest markets, this will be a common trend.

Deduct NEW property taxes after you buyDeduct home insurance costsDeduct maintenance percentage, typically 10%Deduct vacancy+tenant nonperformance percentage(we recommend 5% for Class A, 10% Class B, 20% Class C, good luck with Class D)Deduct whatever dollar/percentage of cashflow you wantNow, what you have left over is the amount for debt service.Enter it into a mortgage calculator, with current interest rate for an investment property, to determine your maximum mortgage amount.Divide the mortgage amount by either 75% or 80%, depending on the required down payment percentage - this is your tentative price to offer.If the property needs repairs, you'll want to deduct 110%-120% of the estimated repairs from this amount.Be sure to also research the ARV and make sure it's 10-20% higher than your tentative purchase price.As long as the ARV checks out, this is the purchase price to offer.It is probably significantly below the asking price.

Also, townhomes are a great bridge property, it's a common trend that those in townhomes are aspiring for home ownership meaning credit sensitive and with that right mindset. 

.: For current/past BAM investors, how has your experience been?

They can provide valuable insights on current trends, upcoming opportunities, and what’s really working in that area.

So, if its a good deal at current rates over time it will only get better as you get opportunities to make moves like that. 

Quote from @Alan Asriants: There has been a growing trend recently of individuals looking to house hack single-family homes.

Option 1 doesn’t seem ideal given California’s tenant laws and current market.

I’m an investor from Toronto currently looking to invest out of state

Yes, it is currently an FHA.