It even has 1 less level of government ruling overhead! 

Those will be the governing docs for this situation. 

The  association I'm in has a program we use that has these properties already listed there but in the South Florida area.But for you.....I read in the book Wholesaling Bible, "To get a pre-foreclosure list you have two options: (1) you can put the list together by going down to your local county government office and searching for and finding the recent lis pendens or notice of default findings; or (2) you can buy the list from a pre-foreclosure list provider/broker."

I worry that it will be hard to find good tenants because most families that need that much space either 1) already own a house, 2) can't afford such a large apartment or 3) can afford an apartment that large short term, but long term will end up inviting their extended family, etc. to live with them because they have so much space and can't make rent on their own.The only good potential type of tenant I can think of is a middle-class family that needs non-permanent housing -- e.g., professionals who are in the area for a year for work and want a large space to rent for that period.

I am a licensed and bonded Public Insurance Adjuster as well as an experienced skip tracer.

In general, the federal government doesn't care HOW you borrowed the money, they care what the borrowed money was used for.

I would still classify myself as a newbie in the real estate investing world, i have 3 rentals currently, but they all came from my military days as personal owned homes that i kept and turned into rentals, i had 7 rentals at one point, but i sold off the non-performing properties as soon as i could break even on them.

Based on my income + about 70k in savings from selling non-performing properties i have been debating a few ways of going...I have been keeping an eye on MLS listings since i still hold my real estate license for the past few months and Craigslist for cash deals, but i feel the prices are just terrible right now on your typical 3/2 rental properties...Option 1: Should i keep looking for 3/2, 4/2+ under 150k deals for rentals in hopes of something popping up?

That should be more than enough for his household of ONE.Security Deposit: $2475 (1.5 x rent, the max allowed in NJ)Good government job with opportunity for advancement.

Its tough to give a spot on answer as I don't know your credit profile, terms of the loan etc, but a 6% interest rate for a non owner occupied property may not be too expensive.