Can anyone give me specific advise or websites to go to, in order to generate a list to find these motivated sellers in Camden or Gloucester County NJ.

Moreover, I need to pay 5K above LP to secure this property and with my very first deal, I'm not getting the warm and fuzzy feeling.

This ROI is less than I generally like to secure, but the timing of things makes this purchase beneficial in a number of ways. 

Carl,Just because he says he's not selling securities doesn't mean it's true.

Or should I just take it out of their security deposit?

A signed lease within 2 weeks with the remaining security deposit due at that time.

If you did land contract you can go to the county and have your name on title which puts it on public record. 

He used his security for his last month's rent. 

Some of the better forces in Congress are working to raise the cap under Title III to $5M:To amend provisions in the securities laws relating to regulation crowdfunding to raise the dollar amount limit and to clarify certain requirements and exclusions for funding portals established by such ActLet's hope this happens.  

https://www.biggerpockets.com/flip-analysisYou may find traditional financing difficult to secure on such a small loan amount, especially if the property is distressed.