If in the year 2000 you invested $200k in Cleveland and $200k in San Diego both with same level of leverage.  

I don’t see anything wrong with paying points if you like the rate, getting it to a level you like is just personal preference.You’re either going to pay it on the front, or the backend. 

I consider that the upper bound of reasonableness.

There are many factors to consider when investing in any market, but the main things I work with my clients on are price point, level of rehab, exit strategy, and risk tolerance. 

For the level of risk involved investors want 20% annual return.  

If you can get fixer-upper in an otherwise safe (looking) Class A/B neighborhood, you could put in some sweat equity then rent that out.

In the short term, I aim to replace my monthly income from my current entry-level job, I dont make a ton of money so this shouldn't be too difficult.

Jim invested in a small apartment complex, and within two years, not only did the property's value appreciate significantly, but the rental income also provided a steady cash flow.Real estate offers a level of control and tangible value that can be really rewarding.

We actually put one in our lower level and while this is fine in the summer , in the winter in the northeast this is adjacent to a bathroom and the bathroom is then freezing. 

Many syndications provide tax benefits such as depreciation, which can offset income, and some offer favorable capital gains tax treatment when you sell.Municipal bonds are another tax-efficient way to diversify, as the interest earned is generally tax-free at the federal level, and sometimes state level too, depending on where you live.