If I were in your place I would not give my money for a company to invest (I don't know anything about rootstock but I trust myself more than any company).Since, as you know, New York is very difficult to invest in, I would really look more into out of state investing! 

What should my intital investment goal be in I am currently netting 5k?

The space I'm operating in I personally don't worry/fear institutional money competing with me.  

Right now I cannot get a conventional mortgage because there is no income coming in. I

Though I'd guess that you're a nice guy and give some people the warm and fuzzies, the thing that you want people to invest in is your character and competence.  

I feel like by finding houses before deciding what market you want to invest in is putting the cart before the horse. 

My savings are only about 20k with the other 300k being tied up in the equity of the home I currently live in. I

The difference in value comes because the 20% will get you 5 times as many properties, 5 times as many cash flows, and 5 times as much property value, thus 5 times as much appreciation...the equity, or cost going in, is the same for both options. 

The neighborhoods where they are none, could likely be very resentful of the first one that comes in.  I

I think next time I'll have a plumber make sure all sinks are clear and checked by them before the tenant moves in. I