Through BP/J Scott's books I feel like I have a decently solid grasp on what I do to approach a successful flip. Now I'm just struggling with finding something to flip

[Jeremy Hale]

I've been doing as much research and reading as I can possibly do the past few weeks in anticipation of trying my hand at my first flip. I'm failing miserably at finding anything to flip, though.

My two problems seem to be: 

a) not enough capital to outright buy and renovate

b) too many competitors

I have about 60k cash I feel comfortable putting in upfront, perhaps 80. With this amount of cash, I can *maybe* purchase a home outright, but that leaves me with $0 funds for holding/rehab costs. I feel like this is significantly hampering my ability to find a place right off of the bat because I suspect the only deals I'm going to find are going to be through house-hunting on my own/direct mailings. MLS listings have been an abysmal failure for me so far.

That brings me to my next point - the competition for MLS listings is so incredible (and I'm not even in that big of a city) that I don't see how anyone can purchase a house this way. Just the other day I went to a promising lead and there were six (6!) groups of investors/contractors looking at the place when I got there. Of course they were all making random comments to me about what a mess the place was to scare me off. My realtor and I did a quick analysis of the place and it was in such bad condition that we both thought I'd realistically have to get it for ~60-65k to turn a profit. It wound up selling for 85 a few days later to a guy who is a contractor and can rehab for way less than I can.

I suppose at this point I'm just unsure of how to approach hunting for a house. I suspect trying to purchase homes from people before they're listed is the way to go, but I don't have the capital to give them appealing terms of just outright buying. The MLS, on the other hand, has such insane competition that I don't think I'll ever find a decent deal on there.

Thoughts? Suggestions? 

Thanks BP