I'm not familiar with your area but if there are multi family homes available for a little bit more you might be better with that getting some positive cash flow going from the start and work on a rehab flip your next time around.

At the time we had 16 rentals and about half of them were free and clear, and we were buying way less house than our salaries would have dictated for a "normal" (read BROKE) couple so we qualified with no problem.

So, I think can see that you have the energy, positivity, and sheer determination to jump on the real estate investing bull and ride it out.

My theory is I can get the house rented asap and have a positive cash flow right away.

This means consistent hourly pay or salary. 

Some would argue that if you have a positive cash flow regardless of the number it would be worth it.

I'm not sure I understated the Washington state guidelines and I have a motivated seller in a foreclosure position wanting help.

Option 1) Offer significantly higher with a conventional loan and hope they go for it over a cash offer.Option 2) Do a 203k loan (which I'm positive they will just ignore)Option 3) Hard money loan so we can play with the cash guys...?

However, would most consider the $116k personal income and have a bank account where it all flows into for spending however you see fit, be it reinvesting, personal travel, etc... or would you consider it business revenue and take a salary?

Otherwise, you’ll need to find a partner OR maybe you just aren’t in the right financial position to be making this purchase...