@Joe Jor great points on the buy-and-hold approach. 

Also what is the best way to approach listing appointments?

I’m a realtor out in Erie pa, I’m wondering if there’s any agents who prospect distressed owners and if so, what’s your best approach ?

Of course, there will come a time during the process in which it might come up and at that time you can take the time to explain the situation to the seller, but hopefully you have already built up enough rapport with the seller and the deal is already approaching the finish line, so it won't be an issue. 

Liability protection should always be a multi-tiered approach.

How would you approach learning the local market in the quickest and most sufficient way possible?

Easy and quickest way.

Have you had any issues with this approach or has it been pretty smooth sailing?

Option 2 seems like a more conservative approach but may take BRRRRing off the table so you will need to save longer to afford the down payment on the next property.If you haven't done it already I would run all of the contingencies through the BiggerPockets Calculators to see what will give you the best bang for your buck.I wouldn't get hung up on the fact you've never BRRRR'd, nobody has done it until they do it and plenty of people out there have proven that it is possible.

This so they can dismantle prop 13 in stages, the stealth based gradual erosion approach.