As long as you factor the higher interest rates (they are short term of course) into your initial calcs before you close the house.

If the property is worth less than what is owed, a short sale review likely can be initiated with the mortgage servicer.

Where should be my first initial focus be on to start investing.  

Do not plead or argue with the tenant.

@Brandon Stevens That's where I initially started, but have been having little to no success.

My initial goal is to purchase multi-family unit buildings. 

I believe that an artificial appreciation took place initially, but fortunately this was a good thing as consumers took the time to rebuild their credit, they could come back and buy the same homes (only now more renovated) in three to five years.

I am told now that all of the units are vacant - will the rent control prevent me from initially listing the the rent in line with the market, or am I handcuffed to the rent controlled properties in the area as a floor or ceiling? 

Yet these agents were asking for your highest and best offer initially and would probably meet half way between your highest offer and asking price, which is...  

The property could be a great wholesale or rehab.The sellers were given a letter stating they could initiate a short sale (a loan modification was denied).