low pre-approval amount? Townhouse of SFH for 1st rental property

[Jade Jamison]

Hi, there! I am just starting out on my real estate journey. I am pretty young, 23, but have been determined to acquire my first property and start my journey/portfolio. 

To fill you in: I recently qualified for a loan amount of 200,000. That is not a high amount at all in the DMV (DC, Maryland, Virginia) location with a focus in Maryland areas surrounding DC. There are barely an houses on the market that low, and if one appears, it's literally under contract an hour later before I can even see it! 

My question is...should I just settle for a townhouse as my first investment property rather than a SFH? I am nervous about HOA fees, and rental rules (as I want to rent out other rooms), and renovating. I mean...can you even renovate a townhome?? (Ex. tear things down, build another room etc.)

I am getting pretty discouraged. The market is a bit crazy. Advice would be much appreciated, thanks!