Another piece of advice: have a really good home inspector that you trust who can give you a realistic expectation of repair costs.
A Realtor is always a must on your Real Estate investment team.
A good deal on investment property is relative to the area you are in; and yes, you can find great deals now in the Bay Area, especially if you have an agent who helps you do the search and leads you to the best property. .
They have the knowledge of the market, the inventory, what are selling now, and what are stalling, How to make attractive offer, how to talk to the listing agent, another middle person to negotiate the best deal for you.
Many times, FSBOs want to get the most for their money (saving commission, priced high and then they eventually go with a realtor), you really don't get a good deal buying through them and you bear all the liability that come with purchasing a property on your own.
With short sales, the bank has not yet realised their loss and they have employed loss mitigators to bail them out the best they can. That is their job.
Go for the bank owned homes. No emotions to deal with, no idiot loss mitigators to deal with. Just brass tacks. This is the market to work. You'll get a much better deal.
And by the way... there is financing available out there for these homes. 100% even for investors! Your credit can not be horrible but it does not have to be stellar either. Stated income is OK too. Even for investors. If you know where to look.
I agree with Ute, but also keep in mind, that the agent has your best interest in mind. Disclosures are also a huge issue. Most agents are very good about getting any and all disclosures uncovered and disclosed, whereas if you are dealing with a Seller directly, they may not disclose everything... Also, an agent may have more resources to search for you (via the MLS, and other networks they belong to) so you are at an advantage by having access to all that information. Bottomline, like Ute said, it does not hurt you to use an agent because the Seller typically pays the agent's commission.