We live in California at the moment and I have W2 job and my wife a small online business.

Also, focus on 2 years of job/income stability.Class D Properties:Cashflow vs Appreciation: Typically, all cashflow with little, maybe even negative, relative rent & value appreciationVacancy Est: 20%+ should be used to cover nonpayment, evictions & damages.Tenant Pool: majority will have FICO scores under 560 (almost 30% probability of default), little to no good tradelines, lots of collections & chargeoffs, recent evictions.

Get a stable income, job and start with going the simple route.

Also, focus on 2 years of job/income stability.Class D Properties:Cashflow vs Appreciation: Typically, all cashflow with little, maybe even negative, relative rent & value appreciationVacancy Est: 20%+ should be used to cover nonpayment, evictions & damages.Tenant Pool: majority will have FICO scores under 560 (almost 30% probability of default), little to no good tradelines, lots of collections & chargeoffs, recent evictions.

They do an incredible job.  

What I fear about that set is what happens when Josh wants to get a new job? 

Then you have all the TV shows that glamorize flipping etc.. so its no wonder there is so much interest in real estate right now.Then you have the I quit my day job to be a full time investor..

But if your goal is to leave your day job soon, multi family will offer more cash flow typically.

I can make more money spending the equivalent amount of time in my day job.

Alternatively, once you have a full time job (or an employment contract), you should be able to qualify for a loan and utilize a Down Payment Assistance program.