You can use Hard Money lenders, private money, your own saved money or even start with a deal that is in a relatively inexpensive market so the cash needed is low. 

Logic says I'm going to pay 3000 in expenses, soon enough, if I keep negatively cash flow like I have now.

Assuming 50% expenses and spending the rest on PITI can get you in trouble.In the last 5 yrs my duplex has averaged over 76% in expenses per yr including capital improvements.

There was something about putting up signs that gave me some momentum and it was a fairly inexpensive way to practice talking to sellers. 

I think you've come away with a big, but inexpensive lesson and it's something to be thankful for.

This is hit or miss but it very inexpensive and worth a try.

Here they have a list of free or inexpensive and legitimate resources to help the borrower:http://www.hud.gov/offices/hsg/sfh/hcc/fc/None of these agencies will solicit them, so you can gain trust by warning them not to work with these outfits calling them on the phone or sending them mail.We also send them to the Making Home Affordable site.Most mods fail for many reasons.  

All I can say for me so far is that they handled my POS violations inexpensively, they got a 1 yr lease signed by the existing month to month tenant, and the checks come in every month

Is it typical to assume about 50% of gross income in expenses?

IMPORTANT: I would stage the house with color in the kitchen & baths, (flowers, canisters, some nicely done drapes or blinds, etc) We stage our properties and we spend less than $500 - there are plenty of inexpensive materials to use for accents that don't cost much.