Is that a legitimate excuse for his score being so low?  

Whats my best option to invest in his soon to be foreclosed house with very low money down?

Rigo,Yes, 50-60% of ARV is extremely difficult to find from a wholesaler, definitely not enough of those deals to make a living off of long term.  

BTW, estimating expenses as being 30% of gross may be too low.

They foolishly think they need to keep the rents low to hold onto "good tenants".

I have seen folks try for years to find these mythical private lenders and never do a deal because they can't raise a dime.what the OP is looking for is an asset based lender.. and those are not very common anymore.. especially if you have to find one on the internet means you don't have a track record and have little to no chance of finding anyone who is going to 100% your deal.. unless its just such a low LTV that they are making the loan with a better than 50% chance of owning it when the borrower can't pull it off because the borrower is not experienced and can't execute.  

So what I'm looking for from you, the greatest RE community, is some guidance on which strategy I should go with, and / or more details about HUD homes.I'd love to connect with people who have:Gone through the process of buying a HUD home (so I could get a step-by-step)An agent that specializes in HUD homes (I've heard too many stories of unqualified agents dropping the ball)Experience in the University Heights market (I've been looking on the west side mostly)Experience with FHA / 203(k) loans (to go over finer details)I would be extremely grateful if anyone could help at all.

This deal is extremely thin, offering a profit of 3.5% of the ARV or $14k, which can easily be eaten up by overages on a deal this size.

I am no expert, but what I do not see in San Diego is how we get from the present extremely low inventory levels (especially on the coast and the lower priced $800k and below market) to an excess inventory level which I believe would have to be a precursor to any significant price drop.

Buy low, sell high.