Check out socketsite.comLuxury condos aren't doing hot in SF and there's some examples on that site that are interesting.I think the key here is that it's specific condos some of which were likely overpaid and now we're seeing true value but it's more of unique situation then city wide trend. 

What about this deal specifically would make you say its best left to local investors?

Ask them if they can fill out your application for your record keeping and sign a new lease with you in which you have specifics as to who / where to send rent, when it is expected and the late penalties.

If he insists, talk to your title co. about specifics.

In addition to your note, with specific payment terms, you need an executed and recorded 2nd mtg/deed of trust.

What specifically are the people saying to you when they reject you? 

Depending on your specific location and amenities single families are renting for $1150 to $1450 in that area.How much equity do you have in your home?

Feel free to reach out if you have specific questions.Originally posted by @Brian Garlington:If you want to build a portfolio....consider an FHA Loan FIRST.

Specifically in the Philadelphia PA area, Allentown PA area, East Stroudsburg PA area and the Sussex County NJ area.  

It can be tricky and can be very area specific.