He buys foreclosed or HUD homes in "nice" areas for $18k - $25, spends no more than $5k on rehab then sells them on a "Land Contract" as we say in Michigan which is  a lease to own.

The whole reason for the negative rates is a weak middle class with diminished earning/spending power, with no more Fed firepower to help out.

As a fellow Californian,I will tell you that your small salary doesn't pay for an apartment let alone a multi-family home on a conventional loan.The bank will expect your PITI monthly payments (Principal,Interest,Taxes,Insurance) to be no more then $650.00 per month on a gross salary of 2000.Your gross salary must be 3 times larger than the payment on a conventional loan or even paying rent.The rent you would charge the other families is not allowed to be considered income for the debt to income ratio for their consideration until two years of successful ownership has passed and shown on your tax returns.

I'm under contract for my first fix and flip in East Chicago, IN.Purchase Price:  $50,000Rehab Costs: $30,000ARV:  $115,000I have two financing options that I'm considering.Option 1 - Hard MoneyAPR - 13.5%Origination Fee - $3,000Appraisal/ Inspection Fee - $350Option 2 - Offer from family members (Aunt & Uncle)Family members bring $40,000 to the tableI bring remaining $40,000 plus holding costsSplit sales proceeds on a 50/50 basisOther pertinent details:  I'm hoping to hold the property no more than 6 months.  

You would still have the two requirements of 1.purchasing at least as much as you sell (the net sale or roughly 700K) 2. use all of the proceeds in the next purchase (roughly 175K).If you keep that property as  a rental for no more than three years after living in it for two years you would be able to sell it and still qualify for the primary residence tax free exclusion even though it is a rental at the time of sale.  

I fortunately live no more than 5 minutes away from any of my rental properties, they are all concentrated in a section of town. 

No morality or legality involved.  

@Kyle Grimm  check with your state division of mortgage lending.many states have exemptions for 1 or 2 transactions a year etc.in our state you can do 2 a year and no more than 3 held at anyone time.those doing above that they deem in the business and needing licensure.

She is moving into a 2,950 sq ft home and her total payments are no more than the 950 sq ft apartment! 

I KICK MYSELF EVERY DAY FOR THAT DECISION, but at the time couldn't pass it up.Fast forward a few years, no more license but looking to finally get in the investment game...part time at first, but eventually want to take this on as a full time career!