As my research if income AGI over $150k you dont get to write off a lost on your rental.

You sometimes go into the blind off of visual inspection alone because it's a good enough deal to absorb those types of costs. 

When people buy residential most often they buy off of feelings, layout, and amenities.

Starting off with a fixer upper in your area would be ideal, so you can keep an eye on the project and not rely on an agent/contractor to do this.

I'm looking to purchase an off-market home in my neighborhood and ran into a hurdle that I might not be able to overcome...For context my elderly neighbor who I've been friends with for the last couple of years recently passed away.

It may be ok if you move in after the HML loan is paid off. 

The sooner you buy, the better off you'll be.   

THat's easier to do than you might think: there are 42,000 zip codes, so there are a few hundred thousand people who are "top 5" at any given zip code.Hats off to you for starting to connect with an agent, but I'd wait to buy anything for at least 6-12 months as you build market familiarity!

Or do you mean auctions of foreclosed houses where the lenders who end up with the houses auction them off?

DSCR loans are based off of down payment, credit score and either actual or market rents so it helps to supercharge an investor's real estate goals and net worth.