However, in the past two years with rates going up and the housing prices climbing in our area, even if we do the same process with buying a home, fixing up the basement, renting, etc we'd be a lot closer to just breaking even come a few years time, if that. 

Some of them have more experience and better pricing than Rocket Dollar.

I am torn on how to handle this, he is priced so well.

Purchase price: $900,000 Cash invested: $240,000 Sale price: $1,520,000 Was driving by home this time last year and saw a FSBO sign.

I'd need to know what your credit looks like but just running numbers off the information given in this post, you could do a multi family property, using rental income from property to help qualify around 400k price point which is with 5% down.

You can enter for a lower price, learn the management process, and just get a feel for real estate investing without taking on a huge project.

I just got started with my career so I have a low income relative to property prices in my area (Seattle area) property prices are about 10x my income  

If you were offering an exorbitant amount as a subterfuge for paying more than the short sale price, that would be fraud.

Have you had a market analysis done recently on the price?

Midlothian, Va vs Toano, Va.Property:Midlothian New Construction Stanley Martin 2 over 2 style:  3/2.5ba 1579sq priced at $410KSeller incentives : 5.5% fixed rate for a 30 years.