As you mentioned there will undoubtedly be an impact to the market, but it's near impossible to say how deep and lengthy these changes will affect pricing.If I were you, I'd look closely to see if the property you're interested in are more affected by these new rules.

It demolishes mental barriers/excuses/limitations we create for ourselves and promotes creative solution finding to making the 'impossible' possible."

@Zhenya Levchenko It's going to be almost impossible to find a good deal with 5% down that will cash flow for your friend to get a return for her down payment.Did you try to run numbers on some properties that are available on the market?

Since I don’t work for Google, Apple or Facebook, I am hoping that Real Estate the tried and true method will get me where I hope to be.I was hoping to get into flipping houses in the bay area, but after doing some reading here and other sites, it sounds like finding a below market property is next to impossible in the bay area.

This situation make conventional financing nearly impossible for a seller which restricts the likelihood of a retail buyer being found. 

Oh ya I know the 2% rule- unfortunately in this market it's close to impossible. $3k on $350 is even an optimistic stretch for a duplex in this area. 

There are other benefits to this strategy, most notably that credit cards are unsecured debt so it is way harder (but not impossible) for the creditors to take the property from you compared to a mortgage.  

Some extra hurdles, but certainly not impossible.

Be aware, in most areas if the Reno costs exceed 50%, or maybe less, of value.....entire house must be brought up to current codes, which can include a higher floor elevation, which may be impossible.

Its almost impossible to purchase a flip house through MLS because everyone is bidding the prices up.