The key is to start small, leverage creative financing, and keep reinvesting to grow your portfolio.

This would provide liquid cash to reinvest or use for other financial goals.

Your parents can look to reinvest the remaining proceeds into a DST, tenancy in common investment, NNN, that are passively managed.

Mostly due to the fact my spouse and I agreed on her to have zero involvment in any sort of RE investing (and its our home) I think once you have a good 6-12 months of reserve cash (operating expenses for your own life saved as a back up incase things go bad) save enough liquidity to get the ball rolling on your first invesment.

In the long run, I want to have properties that are producing strong cash flow (eventually would love to own small apartment buildings and syndicate larger deals), but it seems that focusing on cash flow and reinvesting those cash flows will be a slower process than focusing on properties prime for appreciation or with opportunities for forced appreciation.

Here is a list of why adding ADUs in my CA market is typically a poor RE investment:1) The value added by the ADU addition is often significantly less than the cost of adding the ADU.

@Edgar Duarte Selling now under the primary residence exclusion avoids capital gains taxes, allowing you to reinvest the $500K equity in diversified assets like index funds or additional rental properties.

Applying that to RE investing, most would agree your first FHA loan should be a multi-unit house hack.

However, one side fails to realize that by artificially constraining the lot rent of a community, the owner is perpetuating the community’s eventual demise.

The 1031 exchange rule to defer your tax is two part 1) reinvest all your proceeds and 2) purchase a property (or properties / DSTs/TICs) with an equal or greater market value.