They prefer to bring it down slowly and see if anyone bites.

Yes, that's the preferred technique.

I would prefer art museum/fairmount area.

The cash flow will not be as good as a unit needing more renovation in more marginal areas- but starting your BRRR career as a house hacker would give you more of a taste of if you like the real estate development process.  

I can see both sides, but I'd like to hear from people who have tested this (preferably someone in Frederick County, or Maryland in general but all are welcome).Directly stating the sellers situation may irritate them or produce the question "How did you get this information?"

I am hoping to taste a few niches and see what fits me.

Is there any software, preferably free but I'll consider anything that can help me with this?

I generally prefer to do it this way because the fee can be passed on to the tenant and you can set it up to automatically apply late fees if the tenant is late.

Lenders sometimes get in on this game too, alas (especially if it's new construction and you took the bribe to use the builder's "preferred lender" - that's the whole point of the bribe to use that lender!).

Would landlords prefer to purchase a single family homes that have tenants that are locked into a year lease or month to month?