I will bet I can send you some great deal, but you won't have the ability to know they are deals because you don't have the experience to do the math.The biggest problem both new and experienced investors have is nobody watches our backs because everyone has their own agenda and the greed more money.What you need is to do is; rather than banging your head against a concrete wall, post the properties you are looking at, write as much detail about each property as you can including rehab costs, rental income, how much you can increase rents and then let people give you their opinions and advice.Here is a serious problem with people who own their own business and then we wonder why some people are successful and why some are not. 

You clearly don't protect the downside with your approach to originating debt.

Biggest issue is there isn’t enough houses.

Assuming this is legal in my city having 3 people in a 1 bedroom unit, are there any down sides I should be aware of? 

The tub reglazing will be the biggest cost and a shower curtain would cover the old tub from view in the short term.

That's more or less how I started but ultimately, the biggest thing was taking action and actually doing a deal. 

The biggest thing that few people talk about is the ideal investment property and the ideal place to live rarely overlap.

However, the rents are slightly lower and could potentially wipe out your monthly cashflows with one major repair.As for higher appreciation market like West/East Coast, it's more expensive, but rents are higher due to a strong labor market, there will be a certain amount of demand for those markets, but the downside is that you will need to be creative by adding more values for the property.

My book does go into detail on these as they are the biggest potential issues.  2)  The seller changes their mind before you purchase -  my book goes into detail on this but it is important you file what is called a memorandum of lease option - so they can't sell it to anyone else or refinance it to pull out their equity. 

I agree, the myth of the great deal is the biggest roadblock to prospective investors.