I am pretty new to residential real estate. (I grew up in a commercial real estate family, and invested in that at a young age, but just bought a first residental rental property). I am not saying that this is the way to do it, but this is my step by step.
The way we started was by studying rental rates in certain areas of Raleigh where we live. We were shocked to learn how little rental rates by neighborhood or by property type. (We did this by pounding pavement, calling companies, and looking at Postlets and Craiglist ads). This is definitely where I would start- after this I'm not sure if what we did was right or wrong.
Once we figured this out, we had our number that we would pay for an investment property. In our case, we wanted to earn 12% a year after taxes and insurance, and planned capital expenditure (we paid cash so no mortgage), so we set a cap at $70K for a property that would conservatively bring $950/month.
Then we started watching Zillow/Trulia/Realtor.com/Auction.com closely. We could have done a flip, but we are not ready for that, so we just wanted a cheap house with minimal fixes required and NO HOA. Over the course of 6 months, we visited about 15-16 properties in about 7 neighborhoods. 4 of the neighborhoods would have not attracted the best renters, and the houses that we were seeing in the other 3 were too dilapidated. Finally, we came across a property that has some cosmetic issues, but nothing structurally wrong. We offered a price that was slightly above what the recent foreclosures had been purchased at (according to zillow), but well below the list price. We thought we might be insultingly low, but from there we started negotiations and got the place for 65K with tenants that currently pay $925 per month (but rent hasn't been raised since 2012, and is below market in the area).
We chose to do this without a realtor because I have not had the best experience with realtors. We did have a real estate attorney lined up, but in our case the listing agent got a killer price on the attorney, and didn't try to slimeball us into paying him as a buyers agent so the entirety of our closing costs was $600.