I'd strongly recommend seeking out other purely passive accredited investors and focus on building real relationships.

It's a pure business decision, so treat it as such.

guess on my part but at that dollar value and with you guys having an interest I suspect the trustee wont do much about it or spend much time or money on it.. purely speculation on my part of course.

That entire area is basically pure residential housing. 

It is purely friends and family.  

It's pure genius.  

Is this a pure cash flow play or long-term growth through appreciation? 

This is much different than CORPORATE credit, which is purely EIN based credit with no personal guarantees.

It'll be tough to get into a pure investment in your area for 35k but here are a few options:- partner on the second deal- if the numbers make sense and you could get more cashflow then you could look at a higher price point but my guess is this will be difficult to find- Buy your first property as planned, and save the 35k as reserves and/or just keep it for the next down payment on another FHA after a year- find a place that needs some work where you can use that money to fix up and force appreciation to the propertyPersonally, I would look at those last 2 options where you have the cash on hand ready to deploy for the next down payment or rehab costs if needed.

If you're after pure cash flow your strategy might be different.