I would recommend Philadelphia Pennsylvania.Large city catering diverse economic base.Low inventory (that translates into strong rental and home buying demand.)Many investors from California NY and elsewhere are already finding good profitable deals here both buy and hold as well as flips.Property that is available at 50k and with renovations from 15k (cosmetic play) to 50k (full renovations)are obtainable with persistence.

I found the tenant screening website www.mysmartmove.com , has anybody used this site for running screens on future tenants and have any good or bad feedback because i'm in the process of hopefully (fingers crossed) obtaining my first rental.

I mean, you obtain the property free and clear and you're hoping to break even on it?

The owners can hold out because (1) they are collecting positive cash flow on their investment and (2) their interest rates on loans they were able to obtain are at historic lows.

The best prices can often be obtained during winter.

Keep finding deals and unable to obtain financing.

Another potential challenge is the difficulty of obtaining a non-recourse loan that would require me to put down ~40% on the property at a potentially high interest rate.

The only solution I see for Owner 1 is to obtain a note assignment from the investor so she could step in and foreclose. 

A financed offer requires the buyer to jump through more hoops to obtain financing. 

Having gone without credit cards for the past 5 years - following a bankruptcy - I need to obtain a couple credit cards in order to facilitate bidding on foreclosure auctions.