I have lots of clients in the same boat- just getting started and trying to make the best possible choices as they move forward.

Some of the smart local guys are buying still and doing well.

Then you'll have no choice but to put the cost of that onto a credit card, and now all of a sudden you're back where you started in consumer debt, but with the added expense of a house to maintain.

Success is a process, failure is a choice

All that with additional cost depending on the choice made.The people who I am planing to offer the house are people who I have got them on my list of home buyers with pre approved credit letter, or people with cash.

Sorry for all the grammar mistakes and typos, I hate typing on my smart phone...

Do you think it will be smart to start on the basement as the first big project and try to build more equity into the home and then in maybe 2 years sell the house?

There are many groups that make a good living selling these but yet very few long term investors , or smart money ( institutional ) goes for that area.I think there is a reason for that in the over all investment strategies.

Surround yourself with smart and successful people. 

And since your strategy is buy & hold, which is my strategy as well, I recommend Brandon Turner's book "Rental Property Investing: How to create wealth and passive income through smart buy & hold real estate investing" and David Schumacher's "Buy and Hold forever".Feel free to reach out anytime and maybe we can grab a cup of coffee and talk more.Happy investing!