If you were thinking that you could use an FHA loan on a rental which is a pure investment property, that is not allowed.

It's purely based on comps but the comps have downward pressure. 

Other passions include skiing, BBQ, eating/drinking (craft beer/scotch consume a lot of my energies), and generally being near, on, or in water.Cheers-Morgan

My apologies Everyone, as I am in a temporary residence, I find myself drinking coffee and doing research at a local shop a few times a week.The main problem I had was that I did not factor in the possibility of my agent and the sellers agent working in a coordinated way.

But that number is pure serendipity. 

If you were to buy as purely a rental, you’d probably have a higher rate and higher down payment needed.I don’t think this gives you a lower down payment on future purchases either unless that next purchase is the new owner occupied home.

Your risks are the California market may be some where near a top (pure speculation), at the point you have to do some capex work or have a vacancy you are losing even more than the $500/month.You will be able to accumulate cash easier, to make your next purchase, if you aren't losing cash each month. 

@Michael K Gallagher Awesome I'll definitely drop by there for a drink and thanks for the referral!

So, first of all, definitely be sure you are able to document where the cash for the purchase is coming from, and that it's purely YOUR cash if YOU are the one applying for the loan (a HELOC on your residence is ok). 

If you are purely looking at the investment aspect of qualifying.