Brand Newbie needs ideas?

Brand Newbie needs ideas.

I just bought a two story-house in February 2004 for 162,500 negotiated down from 169,900. Built 2001, 3 bedroom, 2.5 bath, nice neighborhood, 5 minutes from mall, 5 minutes from highway, 25 minutes from downtown Atlanta.

There’s a house for sale in my neighborhood for 167,900, which is down from 189,900 2 months ago, 5 bedroom, 3.5 bath.

I know this is a good deal from my research for buying my house with the intent of renting it when I buy my next house some years down the line. They are building a wal-mart down the street this year widening one of the highways in the next year. Area has the best schools in Georgia. And they are building a subdivision right next to my subdivision with houses starting at 180,000. There are two 3 bedroom, 2.5 bathroom houses for sale in my subdivision for 169,900 and 189,900 respectively.

I spoke with the owners, who still lived there, a month ago and they said the house was hard to sell because it was a five bedroom…. I don’t see how this is an issue but if it is please enlighten me… can’t they like use the extra room(s) as an office.

My dilemma… I am broke after getting my house recently, my credit isn’t the greatest but I really don’t want this to prevent me from getting started in my real estate investing career after reading forums and books for the last year and a half. I want to get in with my first deal with as little risk/my own money in the deal as reasonably possible. I’m pretty sure I wouldn’t be able to get conventional financing and wouldn’t want a loan under my name unless I could have some sort of financial cushion/ savings to cover for any vacancies or emergencies because I don’t want to loose my house in the process of learning about real eastate.

I have read and feel like purchase option, control house with lease option then lease option the house out, would be my best way of getting into real estate. I don’t think foreclosure or wholesaling would be the best thing for my first few deals because of lack of cash and experience. The major drawback I see with this is that I get the feeling the getting real estate this way is very risky unless the proper protections are in place (LLC, good real estate lawyer, good paperwork) which all take money or experience that I don’t have.

Please let me know your thoughts of what I should do. I know that somehow there is money to be made here but I don’t know what to do.

Thank you for any assistance advice or information in this regard.