Can you please provide a specific example - there is no rule against this, and you are certainly allowed to.

So, your focus may need to pivot from high rental cash flow to little to no cash flow as a rental with an appreciation upside.I would recommend taking your $150K to $200K and securing a solid equity position in something that will cover its expenses and maybe provide a small cash flow, but then is poised to appreciate nicely over the course of the next several years. 

We're willing to live almost anywhere in the greater Sacramento area based on what we can afford, provided of course that the property is in a decent neighborhood that has a good chance of attracting responsible tenants.As for budget, I believe we could get a conventional loan for properties up to $600k, but my strong preference is to find a distressed property (or seller!)

So I’ve read that unbrella insurance providers require you to use them for car and home.

Even if the rental has a decent cash flow with additional flood insurance, we're still not sure we want to take on that risk as we are out-of-state investors (planning to move back to KY in the future, but not now) and we don't like that it will potentially bring down the perceived value when we try to sell it in the future.The seller has never lived there and has not provided any information on if it has flooded before or not. 

Please note the information provided below is a layman's definition designed to provide a basic understanding for the general audience.

I had a good relationship with the listing agent and was able to structure a below value deal (beating out iBuyers and other investor offers).

.: Quote from @Jay Hinrichs: having been a back room vendor for Montelongo  Vertucci  rich dad poor dad.I got to interact with hundreds of students.. its like anything RE related only a little worse than say RE agents .. 20% of RE agents make 80s of the income

Neighborhoods near major employers like the AFB often provide reliable rental demand, which is a great foundation for a long-term hold strategy. 

Purchasing a property for your child while they attend college can be a strategic investment and a great way to provide them with stable housing.