He recommended an attorney and mortgage guy, so now I just finished submitting all the paperwork( so much freakin paperwork. all my bank statements, 2 years of W-2, IRS, passport photo, driver's license photo, i was a bit slow with this and took me over a week). waiting to hear back, see what my max on my pre-approval is. 

Slow and steady wins the race.

Option 2 is a  3br house in a slow market with minimal updates.

In 2007 I slowed down, when I bought  a home in Oak Park, and sold all but two properties. 

You might have to slow down your rate of posts. 

I prefer the slow and steady get rich, as compared to trying to win a lottery every month, but again some folks can do it. 

(Go when it's slow).Failing that, try to talk to the owner at some point - or find other agents familiar with the listing.

They rent the house for more than market rate - the problem is twofold:When the good tenant realizes they can get a better house for the same $$, they leave after one year and your chance of getting that rental rate again is slimThe tenant is willing to pay more b/c they have less than stellar credit - you end up paying for this mistake in slow pay to no pay and possible eviction...then you have to turn the property2. 

We put in our offer with a "acceleration clause", saying we'll pay a certain amount over the highest bid not to exceed $--------. 

To what level I can't say, but the demand isn't slowing even in the off season.