I have heard that Memphis is a good market for rental properties, so the idea of building passive income in that manner is attractive to me.  

I'm not particularly thrilled about the idea of buying a multi-family property and living in one of the units, but it seems like the most (fiscally) prudent decision for me, at least right now, as I only have enough for a down payment on one property.

If this guy gets rejected I have no idea what we'll do.

@Matt WeissI think it's a great idea offering 2 offers with different closing times.

I was also curious if you have a ballpark idea of what an attorney charges for these services? 

Hopefully, you've got some good ideas in getting started.

Direct mail to absentee owners may be a great idea, you just need to understand it is not magic, and will take a min of 6 touches to your list to possibly close a deal.

I would agree that the best idea would be to simply ask them this exact question when discussing the first property.  

My long term goal is to keep 1 in 5 properties(at a minimum) to create a passive income stream.Do you have some ideas on how to stretch the 200k in my situation or am I on the right track?

Great idea in regards to financing the fees if I decide I need to.