Additionally, even if I had the buying power, this would not be the deal I was looking for.I do live in a desirable location with deeded access to a large lake at the end of my street and I'm about 2 miles from the beach, so vacation rentals do well here.What would you do in this situation? 

I always do the same thing:I analyze the deal using my numbers and my desired profit target, I get my highest-and-best offer, and I make that offer.  

Appetite for risk, anticipated income needs, desired income...all these will play their part.Like others have said, be patient, take your time and do some serious research on the various avenues.

I don't think it is a desirable house to rent out because it has high HOA fees and a swimming pool (which I don't wish to maintain).3.

There is also an FHA 203k loan which you could use to do renovations but you may need to look for slightly less desirable properties in the hot areas ones that have been sitting for quite sometime.

With attention to Saj comment you would think it’s not a desirable place to live but for the past 5 years Portsmouth NH has been rated the best place to live country wide.http://www.nationalgeographic.com/travel/digital-nomad/new-hampshire/portsmouth-united-states-greatest-small-town/

Is there a specific reason you no longer find the property desireable?  

I focus on multi-family properties because that's what I have a desire to invest in, but I'm not in a position to buy as of yet.

Jonathan Twombly Cash flow is definitely my most desired goal to achieve.

We found a home that suited our needs and desires.