-If I'm good at finding deals or have a motivated seller, there's a good chance I'll be purchasing below the appraisal value, correct?

Furthermore, demand for Austin real estate is so high at the moment that there's a good chance you can make a great profit, regardless of the price you pay to purchase the home initially.There's also a new reality TV show specifically about flipping houses in Austin, called Flipping Austin, which is a good sign that flipping houses in Austin can be a lucrative entrepreneurial venture.

Yes there is a chance that it hits the market overpriced.

Why have one you know is going to break even if fully occupied with a high chance of taking a loss annually. 

By chance do either of you know if there is a title company in the area that will give me a list of cash buyers for free?

There's a good chance they'll still be there 5 years from now.

The very very little deals that come up on the MLS last a few hours, so if you don't jump on it ASAP there's very little chance you get them.

House #1 taxes/year roughly $3kHouse #2 taxes/year roughly $1.5kHouse #1 has a nicer neighborhood, better tenant pool potential, and higher rent potential to go along with a higher chance of appreciation. 

If there's something else pulling you to another area that's fine, but don't leave just because of tenant laws hahah.A lot of beginning investors read some horror story post or hear that California isn't as landlord friendly as other states and think that means every tenant will be the renter from hell who gives them tons of problems and constant headaches.But, you or someone you know is a renter, and you probably wouldn't consider them to be a bad person or a bad tenant... and there are plenty of great tenants out there.And don't forget there is a lot you can do to mitigate the chances of troublesome tenants.

With the property being an investment, what are the chances of getting a 5% down loan?