I will echo everyone's comments: Find a good PM, stay in C class neighborhoods, know that it's a long game, and that you're going to be writing a personal check now and then if something big goes wrong.

If you’re not going to make the smart move of selling tax free, and make the questionable move of being a landlord in Ca just because you already own the home…A) No LLC, it won’t help with taxes, liability, or anonymity but it will increase the cost of insurance, taxes, and any financing  (and maybe the bank calls the current mortgage  due.)B) Get an umbrella policy if you are worth more than $1M, maybe $500k  C) Don’t even THiNK about doing this yourself.

Firstly, like many mentioned $20k is not going to be enough, and in my opinion you might need to put down around 30-40% to make a property cash flow at all, unless it's in a C-/D area then maybe you could do less.

Quote from @Michael C.: Hello all, I am trying to figure out if this custom home on the hill in Castle Rock Co is a good investment. 

Hopefully, this first investment will launch our journey in real estate.Here are some criteria we have in mind:Not in downtown SacramentoClass C+ or B location, since we will be living in one unit (we just want a safe location)Units with shared walls, not ceilingsSeparately meteredFairly renovated or well-maintained (not a fixer-upper, but if one unit is renovated and the others need some work, we would love the experience of fixing and renovating)Can you think of any other factors we should consider?

c) If I do find a property that is in need of repairs, how do I go about the renovation process (given that I won't be onsite or close) ?

By default, a multimember LLC is taxed as a partnership.There is an opportunity to be taxed as a corporation(C or S) if proper elections are made.Just a reminder that an LLC is required to file a partnership by March 15 of every year.The partnership will generate a form K-1 that is required to be given to each member which is then used to complete their individual tax return.

Owning multiple types of multi-family rentals (Class C and B for now), I have a good grasp of the value, in addition to just public rental data, so not really a problem for me.

@Ketul ShethRecommend you first figure out the property Class you want to invest in, THEN figure out the corresponding location to invest in.If you apply Class A assumptions to a Class B or C purchase, your expectations won’t be met and it may be a financial disaster.So, when investing in areas they don’t really know, investors should research the different property Class submarkets.

@Josh C.