I can only imagine the "wild swings" in Houston real estate since 1987.If those Houston REOs are not selling at listed pricing, "keep pounding" those banks with much lower offers!

He inherited a bit of a mess from the previous owner (bedbugs, undesirable tenants, and deferred maintenance), but we're getting things straightened out. 

They are found by pounding the pavement, networking, and getting the word out about what you are looking for.

Some like to pound nails, clean toilets and other things.

Some never get going and have "paralysis by analysis".The goal is nothing will ever be perfect you just have to get started and constantly revise along the way.So many people look for a reason to not do something that they never get going with anything.Fear of failure,fear of success,fear of making a mistake,having doubts are all mental roadblocks.I ran 14 miles the other day without stopping.I am 25 pounds overweight but still had an 8 minute plus average.People always tell me they can never do that and can't believe I can.The point is they never know because they never TRY and find out.Some is physical but most road blocks are mental and people give up with their mind way before their body does.Most are looking for that silver bullet (the next greatest toll that will make you rich beyond your wildest imagination!

A 401k loan has some risks...get layed off and have to pay it back or pay the 10% early penalty as well as income taxes if you cannot.A self-directed IRA is the typical retirement savings vehicle to invest in RE but it has undesireable attributes too.If you are young, you could diversify internationally or dip a little into emerging markets....they are not as highly valued.

Sooo, I have been pounding the pavement looking for jobs in my 'field'.

You should really pound them with fees next time they try this.This seems like a concern, them going in and out, in and out of your property like this. 

It's rated for 1,200 pounds.  

In the few days I followed, I saw 10 to 15 properties sold to 3rd party bidders (daily), but the majority of those were either in undesirable areas or sold at a price that left little to no margin for an investor.