If your cash flow is already slim just on the taxes, insurance, loan payment side then that puts you at more of a disadvantage.

Keep in mind though, the odds of you being the first call for any of them are pretty slim.

If I update the target house it will be the best house in the area even with a slim budget.

Your margin is very slim and on a SFH you are highly likely to be negative cash flow monthly.

To add to what others have posted, Texas' robust real estate market means that a very small % of homes have underwater mortgages, which means slim pickings for short sales.

Thanks John, I am interested in multi family but they seem to be slim pickins around here. 

I'm assuming that they are both trying to do you a bit of a favor by selling you property with instant equity -- I would try to work some creative financing with them (or other relatives) - I think your chances of going through a conventional lender (at any interest rate) will be extremely slim -- but your best bet is to just start asking around your local lenders and find out.

The same thing is going on where I live in PA, but not because it is an overly desirable area- just because there are investors that will do a rehab for REALLY slim profits.

However, as others have mentioned on this forum, there seems to be slim pickings in that area right now (because of the squadrons moving in from Hawaii), especially for a relatively young beginner like me.

Sure you could be the exception but the chances of that are pretty slim.