Eliminate debt, establish a budget, and save.

Don't forget to change all your faucet aerators and shower heads to low flow it makes a huge difference as well as far as water usage and saving HOT water. 

I don't like the returns but we use regular savings accounts. 

They can make or save a lot of headaches for you.

I poured my life saving into it and make it a duplex.

As far as whether to approach them with or without an agent - approaching them directly without an agent can save the seller probably 2.5-3% of fees, which give you some room to negotiate on the price, but you need to be confident that you are capable of evaluating the property value, estimating on the amount of work that is needed, knowing how to negotiate/ structure the deal, and navigating the closing process.

We are able to save about $100K per year so putting down $85K is possible for us with our current situation. 

Instead of their cash sitting in a savings account, they decided it would be a better investment to earn 3% on their money instead of .03% in the bank.

You'll find that rental property investing isn't scary at all and a great property manager can actually save you more money than they will cost!

Now that I am in position, I would like to place a mobile home to generate some passive income, but I don't want to use my savings for the down payment.