Once your credit is stable and you begin to increase your income and savings THEN worry about real estate (or perhaps invest some money in index funds/stocks to begin as well).

Some really insightful methodology here.I've tweaked the affordability index for Cache County to show debt-to-income ratio affordability in the chart below. 

In my opinion, a turn-key property won't return very much so you might as well put your money into an index fund and let it ride. 

I was wondering if showing sufficient cash reserves in index funds can work for proof (even though I don't intend on using this money)? 

Question for all the savvy investors with a little tax knowledge as well.I have been looking to make the switch from my current investment portfolio into index funds. 

As for the rest of your 1099 income that you seek to use for real estate, I would suggest one of two things: 1) Put it in an index fund OR2) Put it in a savings account a bond index fundThe reason why I believe these are your two best options is that it sounds like you want to access this money in the short to medium term (within the next 5 years). 

Investing in low-cost, broad-based index funds/ETFs is the best way for most individuals.

Nobody would think of trying to 'invest' in other sectors with no money.No money index investing.

Here're a few investments suggestions for you to consider.1) stock market - if you're not too familiar, invest in Index Funds2) become a lender - depending on the size of your investment, the rates will vary 3)  invest in syndications - you keep mentioning turn-key (you pay a lot of overhead for these). so I figured syndications maybe an option for you to invest some money passively. if you want to be active, learn it and then partner up with someone experienced to do it yourself.

We have index funds that can supplement any RE income, but certainly the more cash flow the better as it just keeps more of our index funds growing.