Conventional loan, excellent credit and reserves, nothing owed on the property and the property is seasoned.

Also, for a situation that owner simply refused to pay insurance/taxes and let it go foreclosure.

This is certainly text book and absolutely the proper way to analyze a deal.Im not sure what he owes on the home but based on the payment and the year it was bought and the fact that its 20 min from Austin im just going to throw out 500K for conversations sake.500K compounding annually at 3% for 5 years comes out to approx $578,000, and you have the loan paydown aspect as well obviously. 

But, can I even take out another loan to buy an investment home in LA/OC area with the 700k loan that I'll already have from the FHA loan?

@Mohit Arora to gain some piece of mind in this same situation, I drafted a "Holding Deposit Agreement" document that is entered between the potential tenant and I.The purpose is to use the deposit to hold the rental until the lease signing and transition this Holding Deposit to a Security Deposit once the lease is signed and all other move-in funds are collected.You can message me privately and I can send you the doc I drafted.

I don't think I qualify for any conventional or FHA loans as I don't have long enough income history.

Maybe I am misunderstanding or wrong in some way, but I would definitely reach out to your accountant, or a good one in the area as they can get a full overview of your situation and recommend based off what is required in Missouri. 

I reached out to over 15 local banks and I would say 3 are willing to do a HELOC loan.

Is that just for larger facilities or also for residential home situations?

In a very complicated situation, charging a couple of thousand is also reasonable.... he may be acting as an expeditor, or using the service of an expeditor.