One location and 4 rents How could you go wrong 

If I am wrong, that's a good problem.

For instance, a starter home on the wrong side of town in central California is ~$400k now. 

It’s done but can be risky.Just my 2 cents and how I approached my real estate / home ownership process - not saying it’s right or wrong just sharing my experience

They are stuck in 2014 when notes were so cheap and easier to make money: now pricing is tight and even just buying to resell is challenging.Note investing can be more passive than other aspects of real estate but still takes a lot of work as well as a lot of experience and knowledge as there are many moving parts that can go wrong 

Down payment on FHA is 3.5% so you’re not wrong there and safe to assume another 2-4% for closing costs BUT you can negotiate seller assist to cover bulk of the fees if not all.

My objective is to buy about an acre of land, that is already leveled, access is being done, and utilities are going to be 5 feet from the property; and then build 3-4 shell retail spots on my plot, owner occupy one of them with a business and lease out the others.I am meeting with a developer this weekend, but have some wrong numbers regarding the average cost of building a shell space. 

Very wrong approach!

This is personal opinion and could be wrong so use at your own risk.1) Yes, it is possible to find deals where all of the cash flow for 5 years (and often more) is offset by depreciation. 

You can't go wrong in this area.