Competition for deals has increased in my area.  

Otherwise, submit the competitive one.

Remember that your competition is usually yourself, rather than other people, as most people are far too lazy to REALLY work at this profession.

I found their prices to be very competitive and the installers to be well vetted!

Paul,Travis also did not mention that he works with Pine Financial that also offers competitive rates.

If you and the seller can't have a meeting of minds in the middle, great you move onto the next one.FHA on MFR, especially with our older housing stock in the Bay Area, it's a giant unknown if you can even get the property until the appraisal is back.More generally your best bet for using FHA to buy a MFR in the Bay Area will be to go find something off market where you aren't in competition with multiple other buyers putting 30% down, etc.

In our recent purchase we knew the multifamily industry was hot and competition was high.

Since the bank established their acceptable number in the short sale process, they're unlikely to let it go for less money at the auction; there will be competition at the auction; the potential short sale buyer has likely long ago moved on to buy another property, etc.  

If you are using Zillow to see whats on the market (your potential competition) and what has sold and using that to come up with your own estimate of value, then that is ok. 

Just a thing to keep in mind is that there is a lot of competition, and a scarcity of multis in the Baltimore/DC area...so the descent property get snatched up quickly...and even the bad ones have low cap rates.