If anyone has tips on how to start, where to find deals, and/or whether I should go with a 20% down traditional loan or a 3.5% FHA loan please reach out!

Many Private Lenders are offering the initial costs can add to your primary loan but it is usually for one year but might be a good solution. 

I currently live in a home with my parents. The home is valued at around $425,000, and my parents owe around $287,000 on it. My parents want to turn this house over to me and have me run it as an investment rental pro...

Since it is your primary residence I think you can write off your mortgage interest, you don't write off the $$ spent fixing it up - but you would keep track of those as part of your cost basis when you go to sell.

Hypothetically, If a traditional lender charged say around 4000 fees/closing cost etc and 5.5% rate along with a mandatory 25% down payment  ; Are there individuals who can lend to the same person at better terms beating out the traditional lender?

The traditional mortgage broker we are using wanted to use my personal banking and debt-income and needs the down payment to come from me.

It was my primary residence and then a rental property since 2014.  

I currently reside with my family in our primary residence, and have been consuming podcasts and books, with the goal of buying our first investment property by the end of the year, if not sooner.

While this to me seems to be a very practical approach there are zero properties in California that meet my needs and in the loan it states the property must be my primary residence. 

If this were a traditional loan, the lender who would be getting the interest payments, would not be you.