I know a handful of long distance investors who have purchased a few properties in several markets...I wonder their rationale on this.

If you have little money to work with, then use your time... post ads on Craigslist, attend your local REIA and any other Meetup groups, network, door knock, do Driving for Dollars, hand write and stuff your mailers, etc, etc, etcIf you have the money but not the time, then you pay someone to do the above things.If you have neither the time nor the money you won't make it very far...

I live in Texas and am working  on using the equity in my home to get a loan and construct a garage apartment to rent out and try my hand at land-lording. 

To my understanding the banks don’t usually show the house and you’d have to buy it “as is” but how do you know when you have a gem on your hands or fools gold?

On the other hand if you purchased wrong your debt repayment and expenses could show no profit. 

In Bay Area, the downturn in year 1991 and 2001 was only 10%, about the same fee/cost (6% agent commission, escrow fee, property transfer tax, owner title policy etc.) to sell a property.

This data is first-hand, from the accounts I manage.

Now that I have my first deal under my belt, I’m looking for my second Multifamily so I’m hoping for a crash or at least a dip in prices so the buyer has the upper hand.

What can I do to transfer ownership without an attorney?

Was this a contract for deed, sub2, when did title change hands, etc.