However, the wholesalers that I have talked to have very limited inventory 1-7 properties max.I do have a full time job and I am not sure I can do wholesaling yet.

@Paolo Ruggieri - If you buy all cash for $140k with a contract that says you get a $40k seller credit, and actually get that credit......I'm not sure that I as the future conventional mortgage lender lending to your tenants/buyers would have any way to know that you really paid $100k for it.

Is it possible to have an outstanding conventional mortgage and get an FHA loan for a multifamily (duplex or above)?

Also, on one of the forum posts I read it said that conventional lending may not lend on a SFR with a 2nd kitchen for insurance reasons.

You can get hard money with bad credit easily, but if it is a buy and hold, you need to refinance out to conventional commercial, which requires a decent credit score.Start saving your downpayment money and start networking with others at groups. 

Sean,Do you ever get any inventory in the Chicago area?  

DFW has near record lows for inventory and have for the better part of the last 3-years.  

Not a great deal of inventory at the moment, at least in the areas we've been looking (Medford, Malden, Melrose, Wakefield, Stoneham, Woburn).

Any thoughts on if I should possibly do a conventional loan and purchase a single family that I believe is undervalued?

my understanding is even if you only do one flip during your lifetime and have a day job, you have to pay the fed/state/SE tax.it's inventory. buy it, fix it up, and sell it. that's a business - not a stock.that's how the IRS would view it, IMO.