Downpayment, First Time Buyer, Pre-Forclosure

[Matt Burns]

If I only have 5-10% for a downpayment on a $200,000 home and I work a job where I make $25-30k but I have no debt, good credit, and have some big assets such as a car (fully paid off) would I be approved by a bank for a mortgage? If I buy a 3 bedroom house and rent out the 2 other bedrooms to my friends would this be a smart move? I'm not looking to go full time in real estate this is just a way to earn passive income in the future. Instead of renting in Philadelphia I would rather purchase a home in a neighborhood I think will be up and coming in the next 5-10 years. What are your thoughts on this strategy? Is it smart to look up pre-foreclosures and contacting the owner to see if they will sell their home cheaper than houses currently on the market?