That artificially lowers your schedule E for that year but does not impact your overall cash flow long term.

The prices were artificially driven up and people that had no clue what they were doing, people that had no business owning a house, and shill buyers created high prices.War zones are not for flipping, they're for experienced investors that know the ropes.

You know the answer from Fannie, so if you are told anything more restrictive than that, then boom you've just discovered the presence of REI-unfriendly overlays that will artificially limit your capacity to obtain financing when using that lender - basically, these overlays generally have the net effect of limiting you to one property per two or three years unless you are incredibly high income from your day-job. 

My long term goal is to make RE a healthy part of my portfolio and become financial independent early so I can practice medicine because I love to do it and not because I need to pay the bills.

In the case of too many investors, condo fees tend to be kept artificially low and the result is that the condominium associations eventually do not have sufficient funds to invest in capital improvements to maintain the quality of the buildings.

If you do not do this, the years after rehab will reflect an artificially high return and 8 to 10 years later you will project an artificially low return. 

Look in medicine cabinets or water heater closets, areas of that nature for a tag.

Or do we want to build a society where people who will advance society (technology, medicine, science) will thrive optimally?

The BlackRocks of the world artificially inflated the market. 

That's quite a large decrease especially considering that $1 in 1982 would have the purchasing power of about $3 in today's market.One explanation could be that Interest rates were artificially low for a long time (until recently) which may have diminished the need for seller financing.