I have purchased over 20+ HUD homes in Houston, TX previously, and can say that in 2014 they have been overpriced and is slim pickings for Investors looking for deals.

Also, I know Austin is hot but pricing seems slim on the margins as well as competition.

This type of investment can make a lot of sense as a starter home.The out of area cash investors who pay a premium for slim returns are a puzzling story to me too.  

Margins are slim.

The odds that you are the latter on your first time out is slim. 

Some areas might be fat, some slim.

I'm in the business of selling property, it's on the MLS, and the likelihood that you will go find a buyer for a higher price than all the buyers looking at the MLS are slim, Unless I let my seller accept some ridiculous low price to begin with. 2).

But, you don't have a marketable contract, nor do you have sufficient equity for any discount.If your buyer put money down, looks slim, but if they did, it's pretty much on you to cure all this and put them in a position to buy as agreed.

Consider your costs to acquire a property, financing, insurance, payments, title and settlement, that alone can get an owner to be motivated, especially in a slim deal, toss in a couple grand, show they are out of the loop, everything will be managed for them.

@Jonathan Richards - You can narrow down the results by entering things like "Washington State" but the odds of people writing that are far more slim.