The DC area though offers opportunities for flips at a wide range of prices.

Or does it vary widely based on location?

Not sure if it's system wide or just in FL

A colleague did a complete teardown rebuild 18 months ago, and had to redo the driveway because it was a few inches too wide, costing $10,000+ to redo.

So now I'm starting to wonder, should I approach this from a different angle and instead buy an out of state property in a place that actually cashflows with renters.

You will find that Memphis is a gold mine for investment properties and it is a very wide range!

As a transplant to the area, I noticed in Poughkeepsie there a wide range of prices in properties in the city.  

I agree the DMV price points can seem quite high but there are deals available at a wide range of price points. 

They have been firm on "not taking a hair cut" but you made me think of this from another angle:  It has cash-flowed for them for 10 years and I believe they put in 25% originally, so you're right, they could still break-even despite a lower sale price.  

Depending upon a wide variety of factors, it takes between 1 and 10 acres of $3k/acre land (that's already paid for itself through TDR) to create one MB credit, so that got my attention.