Maybe you are running into those types of prospects. 

Also, what are some good resources I should be using as a prospective investor in this market - people I should talk to, groups I should join, publications I should read? 

Well, I am sure you have a list of ways you will make sure nothing like it ever happens again.All in all, you should pay him no matter the outcome.

I previously lived in Phoenix AZ, have friends and family there now, am very familiar with the valley, and believe it has great growth prospects like most major cities over the long term.My experience consists of reading/listening to nearly every Rich Dad book/audio course, as well as reading many other Real Estate books by different authors, attending REI and Cashflow clubs in Phoenix, and a few seminars.

My question is... since I will incur expenses (local REI club dues, Bigger Pockets Pro, entertainment expenses while building a team, fuel while prospecting desirable localities for my target property type, maybe a separate cell number and PO Box for direct mail responses etc...) this year, but will most likely not purchase a property until 2017, am I able to deduct those expenses against my w2 earned income this year?

This will be sure to keep you in front of those prospective sellers when they are online doing research.

I realize I have to prepare bandit signs and other types of marketing that helps me to find prospective sellers and buyers.

I still have about $30 000 in savings and I am actually looking into the prospect of using that cash as a down payment for an FHA loan.

Regardless of the outcome, it's always great to meet local like minded people.

I have few potential prospects that asked me if I am willing to finance the deal as an owner finance.