If so, I belong to a (free) private investor group that communicates over the Internet.

There are qualifying questions you must ask your potential sellers as well as qualifying activities that must be done to determine if you even have a good deal.

I would start with the three year rental history to determine if increases took place or decreases.

That would determine whether or not you're low-balling the guy.  

The lending institution will look at the numbers on the property to determine if it is a good investment.Run the numbers to see if they make sense.

Generally, the rule for every state will be this: Your contract will determine what the rules are unless it is contrary to state law in which case state law will always hold. 

Check the classifieds, internet postings, driving around, dealers, local repo people and let them know you are looking for a home.

I am disappointed, but I will keep trying - I am determined to find a great first deal!

Then hit the internet websites and see if there are any recent sales to estimate current market value.

Reason this seems important is that it would help determine strategy of a larger vs. smaller downpayment to increase cash flow or increase leverage. 2nd Question) I've read about "special allocation" of taxes that allows for the tax gains/losses to be distributed in a manner that is not equal to the ownership stake.