Because of that low barrier to entry, plenty of investors from all over are looking at this city.

As others have mentioned, DSCR loans are generally for turnkey rentals (although outdated rentals may still qualify depending on the level of deferred maintenance). 

Hello everyone, I have no knowledge of real estate but I'm eager to learn this concept from beginner to advanced levels.

The biggest pro of using FHA and conventional financing is you can easily use them to house hack for 3-5% down payment which is an extremely low down payment. 

Since moving into another fixer-upper isn’t ideal right now, consider leveraging your $40K for a low-money-down investment, like house hacking a small multifamily or using creative financing (seller financing, subject-to, or partnerships) to avoid tying up all your capital.

As long as its rational and both parties are level headed im sure you will figure it out. 

I would encourage house hacking, you won't be cash flowing but it helps you save while you get your foot in the door with low DP.

However, looks like there is a harsh line as far as what locals can afford and if you go over that, vacancy is high.Watertown, NY- I’ve seen many great multi-family properties in the low to mid 100s.

@Moshe H.No, not all the time, but the low contributors do not wish to lose it. 

Quote from @Cecil Shannon: Quote from @Bonnie Low: Hi, Cecil - we're in Shasta County, too, and have properties in Redding and Shasta Lake.