If you have pictures, place an ad on Craigslist and Postlets listing the unit for the top end of the rent and see how much of a response you receive.Also, banking on a 20% increase in appreciation to get out of PMI is a risky bet so don't rely too heavily on this. 

(since they'll both adjust every 5).What do I win?

When rates drop it's a WIN-WIN! 

So, if two offers are equally good, the owner occ will generally win.

I'll bet you hear the same name mentioned a few times. 

I know all (okay...probably less than half) of the methods like "drive for dollars", put up signs, yellow letters, etc type of methods to find deals.  Truth is...I don't have time to allocate to doing those things and...

If I can acquire it, she'll rent it for the mortgage price, and let me keep whatever profit I can squeeze out of the sale of her house, its a win-win for me because i'll have a no hassle tenant for the next few years, make so money from her sale, and until she decides to move, she's putting equity in my pocket.

Yes @Daniel Ahern, structuring is something you see a lot when people are trying to launder illegally gotten money or people that win big at the casino and don't want to have to pay taxes on their winnings.

Long term, if I hold both properties, I don't know for sure but I'd bet that the Glendale rents and prices will go up faster than Lancaster, as it is more central, more desirable, and has a better job base ...

In your price range/budget, conventional loans are likely your best bet.