I don't have lots of cash at all, only the naive belief that I can raise it when the time comes. 

I've got a neighbor who formed a religious non-profit and then deeded his primary residence into it.  

This is why I think with tenant screening you couldn't land a great tenant in that area.I know investors that own around there and there comments are "We do not buy in these areas anymore because no matter how nice you make a place the people in that area just thrash it all over again".I looked there myself about 3 to 4 years ago when the market was frozen and things were cheap but the bad areas and high leftover property tax evaluations left me saying (no thanks) to investing down there.I do feel for these owners however I do not want to get religious but they are believing God will take care of the situation for them on the You Tube video.

Many sellers have unrealisitic beliefs about the value of their product.

And it didn't matter because of his investment beliefs and philosophies.

I spent the last 8 years in New York for some school, and religious studies (im an orthodox jew), and I am moving back to LA next week, bringing along a Masters in Education and my recent ordainment as a Rabbi, as well as a few years experience as a Volunteer EMT.I am really excited to learn more about real estate.

I'll tell you a little about my situation and beliefs below, but the key if finding out what's right for you and your situation.Second - there are probably 2 key things that can counteract the risk of leveraging: Cashflow, and Capital in non-RE assets.

The basic formula is pretty simple:-Maximize your income by upgrading your education or job skills-Minimize your outgo by living beneath your means-Religiously save the difference, and-Follow proven investment principlesMost millionaires are not big spenders.

In the case of a taxpayer using more than one property as a residence, whether property is used by the taxpayer as the taxpayer’s principal residence depends upon all the facts and circumstances.If a taxpayer alternates between 2 properties, using each as a residence for successive periods of time, the property that the taxpayer uses a majority of the time during the year ordinarily will be considered the taxpayer’s principal residence.In addition to the taxpayer’s use of the property, relevant factors in determining a taxpayer’s principal residence, include, but are not limited to:(i) The taxpayer’s place of employment;(ii) The principal place of abode of the taxpayer’s family members;(iii) The address listed on the taxpayer’s federal and state tax returns, driver’s license, automobile registration, and voter registration card;(iv) The taxpayer’s mailing address for bills and correspondence;(v) The location of the taxpayer’s banks; and(vi) The location of religious organizations and recreational clubs with which the taxpayer is affiliated.

Save the 500 from the cheaper rent religiously and you'll have a solid down payment for a better 2nd property in a good neighborhood/etc in a reasonable time.This approach also gives you time to set some goals for where you want to take your real estate investing as @ElizabethS. mentioned as well as giving you immediate experience in being a landlord.