It can make great returns and avoid tenants, toilets, and property tax bills. 

@Michael Ealy When you see high foreclosure filings do you tend to pounce for the deals or to avoid because of the neighborhood?

By taking steps to minimize your exposure to risk, you can avoid large, costly errors that will cause you the biggest headaches.

Prices are high, and one of the most important rules in RE investing is to avoid over-paying. 

Everyone has to start somewhere so I wouldn’t avoid those with no experience with investments but you use different math than a residential buyer does.

Are there certain areas I should be looking at or avoiding?

Looking for detailed resources on steps I need to take and to avoid if I am acting as a private lender. 

I was initially trying to avoid HML due to the higher interest rates and go conventional if possible.

How to avoid that is... see my copy paste below in italics. 

I was wondering if it would be wise (or stupid) to purchase a home with little down (5% or 10%), live in it for 12 months (avoid mortgage fraud) and then rent it out while living in a cheap mother in law apartment.