However, I first need to generate capital.

You need a competent contractor, you can try to find one on www.203kcontractors.com, they have a good resource of contractors in specific hyper local areas, who are vetted and well equipped to handle the adminstrative and financial constraint of this loan. 

So, as it stands now, you need to pay top dollar to get into the hot areas, but you aren't going to be able to generate any cash flow from the propert you buy, based on the current rental rates.

There are some great deals for just a few thousand that would generate income but usually is accompanied by headaches.

If I were to generate a list of leads using list source (Or if you have better recommendations) why am I targeting people with +80% in equity.

What do you think is your most effective method of lead generation?

The replacement of a roof, carpets, air conditioning and heating equipment, appliances and other electrical or mechanical equipment, wood decks, parking lot, and so forth.

Things like equipment leasing, receivables factoring, equity financing, angel investors, venture capital, etc. 

Hence, my goals as a real estate investor would be to begin generating positive monthly cashflow through rental properties before moving on to wholesaling and in the near future, commercial real estate.

If you are planning on holding onto the property for a while and generating cash flow, then yes, you want to put down the money necessary to avoid unwanted fees and insurance.