My thinking is similar to yours with regard to maybe sacrificing some returns for a much higher quality place and hopefully a higher quality tenant.

Originally, I saw an opportunity to become a "straw buyer" and purchase a small house under rent to own contract until they could buy it off me, but my dad just didn't feel comfortable having his son responsible for his home and that I couldn't afford one of their needs anyways in the area even after I suggested selling my Cobra to fund the down payment - but then he felt guilty about me sacrificing my car.

They may be sacrificing on the short term cash flow number to do this.

Frame this in a context of sacrificing your comfort and convenience NOW to live a better life in the future.Good luck!

Jim Rohn talks about not sacrificing too much and knowing the future non-financial costs of your decisions today.

You can take your excess capital and invest it passively in real estate or in other asset classes and not loose all the benefits of leverage in your real estate portfolio.There are ways to invest in real estate where you can mitigate risk, reduce volatility, carry leverage, get leveraged tax benefits, get some leveraged appreciation benefits, have cash flow, force appreciation, have high IRRs and control your financial future without sacrificing some of these benefits for the others.  

, etc.My freedom from why was enormous and I sacrificed enormously to attain it.  

Common pitfalls are poor underwriting, poor risk assessment, being over zealous, sacrificing prudent lending practice to gain an edge on competitors, no take-out for you loans, lack of available capital, over-promising borrowers and not delivering, improper loan documents or the absence of material docs. 

I don't want my business investments to interfere with my personal business and further complicate everything I do.I realize that in doing so, I am sacrificing some in the rate but it seems worth it in the long run.Did anyone execute this strategy starting out?

Veterans like you have sacrificed so much in order to protect the land that we not only call home, but - in the case of us real estate investors - depend on for a living.With that said, I'd love to help you house-hack a property in SD with a VA loan.