I was wondering should I strictly look for owners selling their homes or can I work with agents as well or does it matter.

Obviously state dependent, but you should understand what it takes to lend legally in your state and ensure your lender strictly complies.

Here is my quick analysis from a buy and hold standpoint using conventional financing, strictly looking at cash flow and cash on cash return.  

I've discussed with her that we need to treat it strictly as a business with proper documentation as if we weren't related.

It may unfairly target and affect certain groups and that the courts are still reviewing these on a case by case basis.What they recommended is that to avoid possible legal action, you don't deny an applicant strictly based on their criminal background history but on other rental criteria in addition to it.

In 21213, I have a few rental rehabs that I purchased and rehabbed for about $30-$35K total, which I rent for $1000-$1200 a month (these are strict cash flow properties with no expectation in appreciation).

In those cases, Fannie Mae has strict guidelines for what they will purchase, and your application will be processed in much the same way for those loans.When a lender is keeping the loan as part of their portfolio, there is far more leeway in how they approve the loan, as they aren't selling it to anyone.Start out by finding local lenders who offer portfolio loans, then begin to build a relationship with them.

If the home or homes nearby have bars on the windows then it is strictly a cash flow option and managing it will require more time and effort.

It is imperative that the HOA have a strict process because there are a lot of landlords who either don't know or don't care who is in a unit.  

What I mean is, have strict financial requirements, 40x rental income & 650+ credit or a guarantor, 2 years at the job, background check if necessary and most importantly you should write up a lease that transfers liability to the tenant for damages, problems, etc..