I played college football for the University of Louisville and graduated about 3 years ago and pretty much didn't know where to go from there.

Degree Real Estate Development with Multifamily Concentration (Kennesaw State University)M.S.

And Merced may also be a good location due to the university expansion although I haven’t looked too much into that yet.

I would take that $40k and identify an area that is up and coming, near a college, university or employment draw, and purchase a small condo as a rental. 1 Bedrooms or studios make excellent rental investments. 

Before I answer these questions, I would like to hear how everyone determines how much they can spend on a house, so that I can narrow down my universe.

Every deal is going to be different, and every different exit strategy is going to have its unique set of factors that you'll want to investigate, analyze and be aware of.Pick up a good real estate development text book, take some university-level real estate courses and find someone doing what you want to do and see if you can get them to spend some time with you.

I lived there few a few years in a 3BR house next to Chapman University while renting out the other two bedrooms. 

Question,I have a friend in Orlando, FL wanting to buy a townhouse 12 mins away from Universal Studios. 

Loma Linda has a high demand for rentals with the hospital and university there. 

I am from Barcelona too, small world.Very interesting to hear your story and thanks for the suggestions.You are correct, I have to be cautious with which markets I get into, but as of today I am still analyzing options and not set with just one.Regarding NC, I like universities as an anchor of value for a location.