Rents there are lower; but in these areas my daughter and her friends choose to rent a large apartment and all live there, each has a room, and/or a roomie.

If the rates go down, you can always refi and get a new loan at a lower interest rate. 

This works better at a lower price point, since the rent curve is more flat than the purchase price curve.  

Does that mean that when I look at the $90,000 house and the numbers are close and the deal would make sense at $78,000 (that is, the numbers would all fit and give me results within the rules of thumb; 1-2% rule for instance) would one then offer what would work even if it seems quite a bit lower than asking? 

Installing electric baseboard and putting the heat bill on the residents will result in lower rent rates. 

Also it doesn't always hold true in really nice parks and/or California, florida, or east coast as those parks tend to trade at a higher price and lower cap rate per se. 

Also- I am assuming it would be better to gift the house before rehab is done, so it’s a lower market value?

However the downside risk is you could also experience lower returns, or even a loss, since your risk isn't spread across hundreds of notes. 

The value is the lower of the appraised value and the contract price.  

There is a somewhat trend for people to live in smaller lower maintenance homes, this is not necessarily against MFH.