Our first purchases were ones that we lived in and added value while we learned.  

CA there is NO possibility of a deficiency judgement on a purchase money owner occ loan.. borrower can walk and the worse that happens is their credit will have a foreclosure if the bank goes that route or a deed in lu. 

If I got a home equity loan for Property 1 and used the proceeds as downpayment for Property 2 and then got a 2nd loan for the remaining 75% purchase price for Property 2, when I sell Property 2, can I use the Property 1 loan as part of the cost basis for computing Property 2 capital gains?

I am a newbie investor looking to purchase my first rental property, and I have been caught between going for a single-family or a multifamily rental.

Why do you think purchase contracts are so long and have such small print?

I would like to get an opinion before I purchase my first property in about a month.

One of the things we do and recommend to our clients is to purchase a home owners warranty to cover all of the mechanical, electrical and plumbing compenents.

If you are very conservative purchase a fixer upper so you can force equity and hopefully have a low enough payment so that you can LTR the property or even sell for profit should the STR avenue not work. 

Here are the pros as i see it: easy (no purchase necessary, you know the property), likely prop 13 property tax discount, possibly below current rate loan.  

Besides all the benefits of real estate, I like the control I have, and I like the discounts on the purchase price, I'm able to get.