While I certainly do not claim to be intimately familiar with the licensing laws of all locales, I disagree with REI and Ohio.The statutes in the states I have operated did not preclude you from acting independently as a legitimate investor.

With the recent downfall of the real estate market is this something that is going to stay around or is it something that is going to die out in time and become pointless?

At some point in time the water pipes broke and now there is excessive mold.  

One thing I really lack is intimate knowledge of the city- though I'm trying to acquire that. 

For my area, property management ranges between 8-12%, though i sometimes calculate at 15% because you want to be pleasantly surprised, not disappointed and reaching in your wallet for more cash when you thought you'd cash-flow. 

Not to mention the already present 3 bedroom place on the first floor, which in time could be converted to a premium dwelling, getting well over $1,600-$1,700/mo.And Mike, I missed your last comment on the ARBNB.  

My names Landon I'm thinking about investing in the downtown puyallup area, it's my hometown market so I know my area a little better, but I hope in time I'll be able to create a credible rapport and start partnering with some of the bigger multi family in my area. 

If so, I would suggest you check out an article by @Scott Trench that was featured in Time's Money Magazine http://time.com/author/scott-trench-biggerpockets/ and take a few of his points into consideration.

Pick what fits your dreams, then get intimate with it!

Think in terms of "use of credit" rather than in terms of strict ratios.These adjustments to underwriting are basically compensating factors taken into consideration, at a point in time, under current economic conditions, flowing with the housing and bond market, they can open the gates and close them later on.