It would leave your net worth really skewed into one asset and class of asset. 

Anyone telling you to buy 80k properties in class D neighborhoods and rent them to section 8 for 2200/m is not doing you any favors. 

It's a balance of cashflow and wealth accumulation.One of the goals is to have tenants pay as much of your cost-of-ownership as possible (loans, taxes, insurance, etc.)In high-cost areas, any Class A or B property you buy will usually negative cashflow for the first 3-5 years, until rents rise enough to cover the negative cashflow + rising taxes & insurance.Investing OOS increases your risks because you may not know the market and you can't check on everything/everyone all the time.If you move forward with your buddies, HIGHLY recommend creating a solid Partnership Agreement!

Have you looked into other commercial real estate asset classes like triple net leases? 

Much like a mailed check/money order is "paid" when it is post marked as it isn't the tenant fault if 1st class mail takes 3 weeks (which actually happens sometimes!).

they think 3k on a how to class is cheap and it is.. and all of a sudden they are going to make huge return based on % but its still small dollars.. and how are they going to convince a wholesaler to even use them. 

. #922-2, pp. 86–95) (noting that upwards of 90% of transactions on the Subject MLS offer buyer agent commissions of exactly 3% during the class period, with the exception of the MARIS MLS consistently offering 2.7%)....Although it is true that a nominal commission of $1 would satisfy Section 2-G-1 and Defendants agree such nominal commission is mandated, Plaintiffs have produced evidence that no transaction within the Subject MLS took place using a nominal commission.

C class areas/properties to A class areas/properties.

I don't use padsplit (weekly rentals); I rent on long-term leases in B Class neighborhoods.

That is more likely to happen with a blue-collar, middle-class worker than it is with a wealthy person.