The closer the NOI/asking price is to my target, the less I have to negotiate.John D  I am recognized by the state of CA as an expert witness to testify on all aspects of real property valuations including cap rates. 

With limited details it's hard to advise but you might want to make sure that the association "recognizes" it too. 

I usually don't pay much attention to the MMM properties on zillow but recently saw a MMM listing that:At a good location.Good pictures.Priced reasonably in a really hot neighborhood where everyone was looking to buy.Actually I was so intrigued I am thinking of it as a future home and not an investment.Seller is not seem too motivated as I contacted three times stating I am not an agent, not a wholesaler or flipper but genuinely interested in the property as a home and requested a viewing. 

Most deed restrictions are a part of the transaction and almost all deed restrictions must be acknowledged by the buyer through signing a disclosure form recognizing that you are aware of the restriction and will comply with it.

@Cortney Arenstein good for you to recognize what has worked and what doesn't.  

On the other hand, if you know the HIGHEST number that still works for you as a genuine "deal" seeker, then maybe NOW is the time to Offer that number?

Just because the Association recognized your unit as a rental when you purchased (because it was) doesn't shield you from the rental restrictions. 

I recognize many people would love to be in this situation and feel extremely blessed by it, but being new to investing I'm not sure how to maximize that lump sum. 

Not so fast......I'm sure your license has to be active, and if you are the principle/managing broker (whatever they call it there) you must have an actual brokerage business, recognized and licensed as such by the state RE commission.  

Also, it's important to recognize that Fannie Mae has already taken a loss on the property -- someone's mortgage wasn't paid, leaving a debt to Fannie Mae that is higher than the price the asset sold for at foreclosure sale.