Really you just need to check out your competition and see where they are priced, not just the houses listed but the ones that are actually selling

I feel they are very competitive, however I don't know what the pricing looks like in your area, so you will need to check into that for yourself.

The masses seem to preach direct mail as the tried and true way, but like Alex mentioned, in this competitive market is direct mail a viable option for those who don't have a budget of $3,000+/month.Any feedback and statistics (response rates, deal conversion rates etc.) from people currently doing direct mail in SoCal would be greatly appreciated. 

But in a decent or competitive market, it just means leaving money on the table as you would have filled it with decent tenants at average rents.  

Since the market is quit competitive now, you might find it hard to buy at the right price.  

All in all Houston is competitive but also a healthy rental market.

Or do I see it as an opportunity for little to no competition for flipping in the area?  

These factors will heavily influence the tenant class that your property will be attracting.

But yes I think its uber competitive for notes.. especially with the internet..

That should also help you be more competitive when marketing your property to your cash buyers.