yes, they can set the reserve at any amount they want.....assuming it is a foreclosure, their final judgment would be their upper limit. 

Your choice would be to earn $750 per month in income and hoard th ecash in yur property praying the markets do not turn or sell and reinvest to earn potentially $2900 per month.Probably the same risk with more than 3X the reward.

It’s their choices they need to live with.

There are a lot of good choices, you can find them on BP.

Disclaimer that i'm new to real estate investing.From just quickly looking at the numbers, looks like you have way better investment choices than the property you listed. for a $300K loan (and $70K Equity), you can find 3 x $100K properties that can get you $1000 a month (or more) depending on the area that you invest in. 

The two common choices for doing so are the self-directed IRA and the Solo 401k.The Solo 401k requires self-employment activity, but will allow you to take participant loans while the IRA does not.A few other Solo 401k benefits:Compared to an IRA, Solo 401k contributions limits are roughly ten times higher.There is no custodial requirement for the 401k.You don't need the additional expense and administration of an LLC to have checkbook control.There is a built in-Roth component whereas IRAs are either traditional or Roth, not both.A spouse can also participate in the same Solo 401k plan.The Solo 401k has additional tax benefits over an IRA when investing into real estate using leverage.The penalties for prohibited transactions are less severe, though it's best not to utilize this benefit :)With either structure, it's generally recommended that you do not commingle retirement and non-retirement assets.

However, for anyone wanting to buy a property in this area to live in this would be a great choice!

Question number one would be is it in a place where your FHA loan is allowed to continue on this as a rental property, if not you may have no choice but to refinance.

I’ve been listening to the podcasts for about 6 months now and I finally feel that I’m at a place where I want to take my first steps towards purchasing a property.

Finally if you wanted to, leverage Baltimore home to pull cash out and buy a 3rd investment property.