But here I can build a 1200 sq foot house for 50k.

I also second everyone who suggested house-hacking as a way to get your foot in the door of RE investing and re-evaluating current desires vis à vis life goals.  

I don't mean to go against the grain of those who are selling that idea - all I can say is that it did not work for me.So.......... back to taking seminars, buying cassette tapes and books - I wanted to learn everything I could about investing in real estate ---- so--I had to get money, working capital, and I needed to go on the cheap - A friend told me about cheap properties you could buy in Baltimore - houses for only $2-3,000 and many of them could be found at public auctions.After borrowing some money and getting some credit cards and a new job - one in sales - I was ready - ready to invest in cheap- junk properties in the City.And wouldn't you know it - I got lucky at my first auction and purchased a cheap house that was boarded up - Because of all those expensive seminars I enrolled in I WAS READY - prepared with my pry-bar, flash light, level, marble and probe - I decided to go to this building that was being auctioned the next day - I sort of removed some plywood and crawled through a window to take a look -Boy was I surprised - this place looked great - I later found out that the estate boarded it to keep squatters out.The next day - I was ready with my deposit and waiting for the auctioneer to start his melodious hypnotic chant - 5 bidders appeared but did not bid because they could not get it - I was the only bidder and got the house real cheap.Today as an auctioneer, investor and developer of commercial properties - if someone would ask my opinion on how to get started I would suggest ---Continue to study but learn how to cut through the BSGet a credit line Learn 20 creative financing techniques - no money down systems (that is none of your own money)Hang with a few successful investors and pick - pick - pick their brain*** Look at 50 houses in the area you intend to invest (not expensive, blue collar, mixed rental and home owner neighborhoods)When you are finished looking at 50 properties - you will be armed with knowledge that most agents and other investors don't have - knowledge of values -Keep a journal, put listings in it, write down everything the agent or owner says, keep a record of the cost per square foot - this will help determine values -Have agents send you expired listings - go knock on the door or send a letter to ask if they are still accepting offers on the property - Remember an expired listed is a property that failed to sell - the seller should still be motivated to sell. 

One of the tough things about trying to make this change is how do I get my foot in the door?

It sounds to me like they just looked at tax value or applied some generic dollar per square foot formula.

Bingo Marvin. 

My question is, should I use my savings to help pay off the loans or would it be smart to use it to get my foot in the door in real estate?

We're building 2 high end homes side by side right now and due to architect, one home will come in around 10 dollars/ per foot higher build cost than next door.  

One of the big topics I will be looking for on the forums are the issues with "cross border investing" I have been absorbing the podcasts as fast as possible, as there is tones of great info and tips sitting in there.I am sure I will be searching for / posting LOTS of questions to get things off on the right foot!

I mean, I get it, it just seems like experience in what I went to school for (Physics) is difficult to come by unless you already have your foot in the door.