Rents only decrease if vacancy drives prices down due to competition.

There is a large influx of people looking to decrease their cost of living as well as increase their quality of life moving in from these high expense areas, and I suspect that trend to increase with the new tax law capping deductions at $10,000 for property taxes.

Even a $200,000 valuation seems low.With FHA mortgage programs available for buyers with low-poor credit and a lower down payment requirement with lower interest rates, you may find it hard to assume somebody would take on your seller-financing opportunity.Assuming your suggested proposition; PP $200,000, DP $30,000 Loan Amount: $170,000 - you're only looking to profit about $10,000/year on interest, with that amount decreasing each year (as the principal payment increases each month).I'd love to discuss this further.

I know zero money down will decrease cash flow... but for a completely NEW house and zero money down, minimal cash flow may be justified.Thoughts on this strategy?

If I refi, I could likely get $30k+ out, but the mortgage would then increase and decrease my net profit, say by $200.

Lawrence Yun with NAR:- 10-year treasury yield is usually 2% lower than prime 30-year mortgage rates; the current spread is abnormally high between the two- Inventory is slightly over 1M nationwide which is historically low- First-time homebuyers, on average, need an annual income of $85K to comfortably afford a starter home; median home price will be 10% higher in 2023- 15% decrease in home sales in 2022 compared to 2023- 1 out of every 5 transactions are being cancelled; 60-64K transactions cancelled a month between July and now- 200,000 less agents in 2023 compared to now; 70% of agents and 80% of mortgage lenders have not worked in a "normal" market2023 Predictions:* -7% Unit Sales* +1% Home Values (various areas may see a decrease)2024 Predictions:* +10% Unit Sales* +5% Home ValuesI agree with your leading point - definite shift in the market, yet real estate is cyclical, so this should not come as a shock to the majority of people working in the industry.

Some have had steadily decreasing trend, with current weekly avgs at about 50% daily sales of the 12 month. 

Also, the supply of AirBNB listings are up 70% year over year, so plan on your rental incomes to decrease as more and more hotels and AirBNB operators increase the supply of accommodations and drive down prices.

The deed restriction stays in place when the property is sold, so it'll be valued based on the decreased income.I would add that "affordable" doesn't necessarily mean low income. 

Work on decreasing expenses and saving up to this amount.