Rents are going up every year so your net housing expense decreases and your net worth goes up with equity and appreciation.Your location is familiar with me.

It was not performing well so I bought it on a temporary (two year) bridge loan.While that was going on, I was busy raising money for more deals in Houston. 

High unemployment could potentially be a factor driving NOI's of properties down, therefore decreasing your purchase price.

It was a fixer-up and figured I could manage the process remotely....nope. 10k over budget PLUS the rent AFTER the improvements decreased $5.

Should I let a "temporary" problem get in the way of what seems like a deal worth closing?

Put in a lowish offer and find tenants with good credit scores, clean backgrounds, not temporary employment, good references.Other questions: - If all goes well I could refinance into a conventional loan with 20% down after the seasoning period or about a year.

If this doesn't include debt service and you plan on using financing, I would make sure to look at carrying costs and see if you could sustain a few months of negative cashflow (assuming you have a plan to quickly decrease operating expenses). 

If its on a decrease you have to do some more market research. 

Some people need a temporary place to live for a few years, whether it be to repair their credit, going through a divorce, relocating for a job or they just outright prefer to rent over own. 

I am living out of state due to work, but am in the process of acquiring a new property in my home state for the purpose of 1) temporary living arrangement, due to possible relocation back to home state, and 2) eventual long-term rental property as this one will cashflow very well.