But, you're not strictly limited to 3 potential properties and this is the source of your confusion.

I am interested in others reading routines. 

Some states have strict requirements about notice to tenants as to where the money is deposited and how it is allowed to be managed.Finally, most of your due diligence will be conducted after your offer is accepted and you are under contract.

A lot of it depends on the flood zone the property is in and I strictly buy properties in flood zone X (the lowest risk zone, the cheapest to insure, and does not require an elevation certificate).  

My experience with FHA is it's really not that "strict" as everyone said it would be.

Most of my clients end up getting similar down payments and rates to a Fannie/Freddie loan, but the hooks being 1) There's usually a 10 year balloon payment on it and 2) strict underwriting on the asset.  

In Illinois, if you have "strictly complied" with  The provisions of the Illinois Property Tax Code, filed a petition for tax deed, provided all of the proper notices to interested parties and no one redeems the tax sale, you can apply to the court to enter an order directing issuance of a tax deed.

I want them to fix small problems themselves, do routine stuff like shoveling and mowing, and call me if there's a problem with the house.

I suggest finding a local mentor who is active in the buy/sell RE business not strictly just a coach/mentor...these two podcasts might helphttp://innercirclepodcast.com/how-to-get-started-i...http://innercirclepodcast.com/finding-a-mentor-par...let me know how I can help

But, as mentioned, check out first time home buyer programs, often the credit side isn't as strict, might be 3% down, some allow non-profit organizations to assist you, sounds like a better way to go in a hot market, you may not have to settle for a pig that can't be financed as you might under seller financing.