Be the bank.

I'm not sure about National banks but I have spoken to two regional banks who theoretically will allow it. 

Ask yourself this, if someone offered to handle all of the property maintenance, watch the property, place the tenant, handle rent collections, deliver rent to your bank account every month, and deal with any inspections and nuisance issues and they were asking for like $30 to $40 per week would you pay that?

I have called 20 banks and no one does a 1st lien on investment properties except 1 stated they would if owner occupied.During the research I read a website, which stated that 1st lien HELOCS on non-occupied are illegal and not allowed by Federal Law.Anyone know if this is true?

Secure a credit facility with a Hedgefund or bank and lend that money out..

Now I'm faced with a choice: Buy for 10k more than the appraised value and get good ROI but start my real estate journey underwater, potentially move into another REI property, go to another bank and hope for a better appraisal price or walk away. 

As you know, the reason you qualified for an FHA loan/rate/downpayment is because you demonstrated to the bank that you're going to be using it as a primary residence for the first year. 

I need some advice on rental bank accounts.

Also if the owner does give me the bank that holds the mortgage should I call the bank to see what they would be willing to take to sell the house?

We lived in it as a single family residence and over the years of things that looked like they had been renovated started failing… we realized the owner before seemed to have a slap it together cheaply himself mentality.