This is an input (note it's in red). 

I first called FirstBank and they gave me a beautiful runaround about having a narrow DTI, and that there were extra taxes for a non-resident investor and that they would have difficulty lending to me because of that.

That's the beauty of this business.

This person has a good, long-time job, but when I subtract their after-tax salary from their monthly debt payments (including the cost of renting the house I am advertising), it's in the red by $900.

Any place you invest you need to have one of the following be true in my opinion:1) purchase considerably below market value (very challenging in a red hot market)2) force appreciation though increase rents or rehab (easier if you have skills/desire/patience)3) be able/willing to wait for the next cycle (5, 7,10,15, 30 years, think Texas in the late 80s)4) have great positive cash flow that you can weather rent loss or massive reductions in rent to the tune of 30-50%.

You really need to know the nitty-gritty about each.You mentioned that it had flooded during Hurricane Sandy - could be a big red flag.

Karndean is beautiful but it's a designer product the traffic master allure is similar in style but has a much lower price point. 

Beautiful view to Koko Head from there. 

Get at least 10 buyers on your buyer list before looking for houses.Then...To find wholesale deals the city code violation list is a good start but make sure these are properties which are red tagged as not habitable, not just a fence falling down or tall grass.  

Put some charming window boxes under those front windows (with some colorful fall foliage) and no one will think twice about the windows ..... except about how beautiful they are!