Glad you're aware of the risks, no go get some deals!

Plus, Sponsors will also be more eager to answer your questions when they're trying to woo you to invest in their projects.Before beginning, I would suggest developing your investment criteria and risk-return expectations.

That is the form that many will call “all-risk.”

It's those maniacs that buy homes cash via quit claim deed off of craigslist that really get screwed.Make sure your property manager is a licensed real estate brokerage.Understand you can not eliminate all risk, only mitigate it.

I’ve left the location pretty vague at the risk of potentially outing a good deal.

Personally given your budget and familial situation I would lean to tier 1... thats my gut.There are conflicting schools of thought which are generally going to be tied to your willingness to risk and the general environment.

Your MIL is a big risk taker to play around with her IRA. 

@Jeron WalkerLooks like you are off to a great start I did the same thing you did by buying my first investment via "house hacking" and using low down payment FHA loan it is the best way to begin and low risk since you gotta live somewhere right. 

Of course, that return comes with some significant risk, so that always has to be factored into the equation.2.

This requires more knowledge of contractors, conditions of homes, and a little more risk.