However, when purchasing a home in the Bay Area with a median-ish earned income, I will need access to the first time home buyer benefits of lower down payments required and lower mortgage rates.

I've done a few deals with seller financing on commercial loans to effectively reduce the downpayment to less than 20%, so shop around with local banks in that area.  

This way, I get the benefits of earning commission on my own deals that I do most of the research for anyways and will not have to worry about paying as hefty a commission when I come to sell if I did not have my license.

Has anyone negotiated a pre-forclosure deal where you were able to get the homeowner and the lienholder to agree to allow you to assume the homeowners mortgage at a significantly reduced rate? 

Your passive income (i.e. cash flow) shouldn't be affected if the market takes a downturn unless the rental market around your properties also takes a downturn & you're forced to reduce rents to compete with others.  

It just depends on what the opportunity cost of capital is for you and what it would do if it was not forced to sit inside your home as immobile home equity which earns 0% ROI.

@Marcus Maloney It has been said already, but you can never have enough details written about the "money" aspect of "bird dogging" which should encompass the potential for money earned and money spent (costs).Your idea to write this book on bird dogging is fantastic and it seems like a subject matter that doesn't have a lot written on it!

Does converting or reducing those now make sense?  

What do you think of this strategy to avoid CFPB regs on qualifying tenant-buyers and still earn a good profit?

I want to earn stable, passive income that can afford me time to enjoy my life, and pursue other deals.