To start the ball rolling, I like adding a unit/income stream where there wasn't one before (changing use, adding a unit to the attic/basement). 

It may be easier on you and friends/family to manage 2-4 tenants on one property as opposed to all over the county...That $25k should be enough to get you rolling.

Most people dont move into an office space until you have some level of consistent business and income rolling in. 

This is a top wonderful First experience and you are making some money and you are learning about everything all rolled into one deal.Good Luck 

But to call it an LBO and not have people smirk or roll their eyes, will involve commercial transactions of at least middle market level (anywhere from $10m-$25m up to say $100m).

Must be a pretty darn good rent roll!

We will see how it all rolls out but I will certainly take your word of caution.  

Not only could you possibly get your entire cash purchase price back (as shown on HUD-1) you even have the opportunity to roll closing costs into the loan if you the numbers work in your favor (you need a great deal to make all of this happen).

You don't necessarily have to have them on a pay roll (I understand that at some point you may want to have employees) The investing world has so many people willing to help out or give helpful advice for free.

With a good credit score and an existing rent roll, you have a good chance with private lending.