They only invest in markets below the circle of latitude that is 37 degrees north (The 37th Parallel).

Yes, I agree with you synopsis and feel that unless we can get this house under contract for way below their asking price ie. 160-170 range .. this is a no deal.

The hard part is identifying the bottom.If you do pursue buying rentals I would try to do it through seller financing,  that way they are non recourse loans or if you go through traditional lending practices keep your loan to value amounts below 60%. 

Once it is agreed to & signed, open escrow, order a title report, have an inspection paying particular attention to plumbing, electrical, sewage (below ground pipes) roof, heating, cooling and get an appraisal.

Having a solid foundation is key, adding significant value to every deal allows you to grow,  I would say with your $50K go out and do a rehab and make $30K on a flip so you can add $20K to your $50K  ($10K set aside for taxes) do it a few times so you have a great launching pad and rehab experience for the rentals. dont buy turn key rentals, always buy below value, and push the equity with a rehab, and right now in the market cycle, only buy great deals, marginal deals will burn you when this market changes.

Please see additional considerations below.401k Participant Loans If your 401k plan allows for 401k participant loans, the maximum loan amount is equal to 50% of the balance up to $50k.

One more thought on owner finance is that you could pay a bit more than other investors if seller will carry because you may still be able to keep payment below your current rent if you are house hacking.

Both delinquency rates are below or around historical averages...Availability bias can distort reality.

Keep in mind that there are minimum requirements that you may need to physically occupy the unit (6 months to 1 yr) but if you chose a property below market value, you have the option of doing a cash out refi and pulling money out of the property for your next investment. 

Ideally you are analyzing from your office and filtering down to only a couple that meet your criteria.