I am located in Sunnyvale San Jose, now it is my understanding that our market here is very challenging and very competitive.

For homes that are far from the Neighborhood value due to the condition ect...aside from trying to explain to the seller the reasoning behind my ARV and the offer price based on what the neighborhood supports and repairs that need to be done in order to get it to "Appraisal Value" what else might be the best approach. 

Anyone have any advice before I approach this?

You can either enforce your lease or let the tenant know that you wont enforce your rules and hope for the best when they break other provisions in the lease....your choice.The middle ground is to let the tenant know that she is in violation of the lease and this is grounds for eviction if the issue is not corrected..... you will not enforce that provision if he goes through the standard tenant screen and is placed on the lease.These are small issues and not worth making a huge issue out of, BUT they set the precedent on how tough you run your properties....are you a pushover or are you someone to not try and take advantage of..... how you approach this situation may have future impact on other things that come up.If this is a good tenant, in a nice property and there aren't any issues, I wouldn't make a big deal out of it, but I would not just ignore the fact that she is breaking a provision in the lease...that gives them the impression that they can do whatever they want

I am interested to hear people's advice on either of these approaches, or even the possibilities of teaming up with a private investor to help with a portion of the down payment.

I am looking at homes online on a daily basis, but right now I have zero'd in on a few zip codes that I believe that 1% of rent to purchase price is pretty attainable (but I'd like to approach 1.1% or more if possible). 

It's been a challenging and exciting journey, but it's definitely made simpler and more enjoyable with a community such as BP.

As far as the webinars goes, I took the 90 day webinar challenge which is to make your next purchase in 90 days.

You'll still have buyers but not as many as you would during the spring(closing by the beginning of summer when school is out) & summer(moving before school starts).You're also approaching election time.

what is the nature of them.. if there are that many issues I suspect this is C/D class stuff which can be a challenge from out of area investors.. you sure about this ?