1) I am currently paying the water bill, but I just pass through the cost in the rent amount.

I focus mainly on fix and flip type deals, but do a small amount of wholesaling also in addition to some new construction and buy and hold.

As @Theo Hicks has pointed out - focus on ROI and not on a $ amount.

@Jose Castillo I think negotiating with the seller is an option to offer him a lower amount on the property and then he pays off the HOA as a part of the sales transaction.

Reserves are the amount of principal, interest, taxes, and insurance, plus any HOA that are needed.  

You hand over a chasier's check for the amount of your bid or greater and they give you a constables deed (tax) or deed of trust (I believe this is what you get from the foreclosure auction).

Originally, I was trying to run my numbers so that I was financing the amount I needed plus the 20% equity, meaning finance $125,000 so that I could pay myself back the $100,000 and have that 20% equity, but the more I thought about it, this didn't make sense. 

This is likely the least amount of work that you would need to do on a property.Is the $40,000 all that you will have saved up in 2019?

I’ve done a good amount of research for a week straight, wanted to know if anyone can point me in the right direction of how to successfully start this journey.

(I would also pay for the monthly rent via my savings/day job – in speaking with the owner, he said it would be a minimal amount because the property needs work).I don't know exact numbers on what the rehab will be, but I've been doing some research on the costs and am working from an average at the moment, as I look up what basic rehabs for kitchens, bathrooms, electrical, plumbing, new roof, etc. could be.