I would like to start investing out of California in order to gain financial freedom.

They are considering selling the home and when they started researching capital gains, realized that they would indeed paying them as the home has been a rental longer than it was a primary residence.

If you have a good paying job... keep doing that and invest in passive deals.

All 20 largest metros had positive gains from Mar'17 to Mar'18.

Here are some basics on the property.SFR RentalLong term (3yr) tenant pays $1350/mo + all utilities (tenant is local school superintendent)Owner possibly refinanced at $100k in 2003.26 acres2 /11 1/4 story capeWaterfrontDetached 1 1/2 story garageTown Assessed Value: $122,300Actual resale value: potentially around $150k Deeded access I have put in 10% management, 8% vacancy, and about 6% others (capex, maint, etc.)So here is what I would like to send his way for a seller financed offer with no money down: Seller financed at 5% (30 yr amortization) with a 5 year balloon payoff payment Balance payoff payment at 5 years (~$91,829) Early payoff <24 mos = 10 points ($10000)Early payoff >=24 mos <36 mos = 8 points ($8000)Early payoff >=36 mos <48 mos = 4 points ($4000)Early payoff >=48 mos <60 mos = 2 points ($2000)Option for buyer to extend payoff date up to 15 years (within 6 months of payoff date, at a cost of 2 points.)Buyer to pay all title, recording, transfer fees etc.Total Interest Paid (If paid in full at five year mark):$24,038Total Sales Price with interest (If paid in full at five year mark) : $124,038Keeping in mind that we make money on the purchase, I would like to offer a fairly low purchase price that would help me get my foot in the door, and continue to give him monthly cashflow and delayed capital gains.  

I just don't want to deal with the hassle for marginal gain.

My long time goal is to have enough passive income through rentals ( SFH and then eventually to MFH), so that I can replace my current W-2 income.Background: For past 6 months, I have been learning ( books, podcast , local seminars etc.) and recently started to search for deals.

Its a good way to gain a strong knowledge base, expand your contact list and you can still earn some cash in the meantime. 

Thus, I am looking at passive real estate investing via good syndications.What are the pros and cons of of SF VS Mf passive in terms of:* tax sheltering w2 income (depreciation, expenses, etc) * income tax rates on passive income VS active income* performance and cash flow reliability By selling my SFHs and investing passively,what do I lose?

I am mainly interested in passive income and do not plan on being a full time investor as I have a full time job that I plan on keeping, at least for the foreseeable future.