Let’s take a look at several scenarios: Ownership of residential property (consisting of 4 or fewer dwelling units), which is financed (individual total ownership in one’s personal name, or joint ownership in two or more personal names, regardless of who is liable on the note) – YES, this is considered a “financed property.”Ownership of residential property (individual total ownership in one’s personal name, or joint ownership in two or more personal names), which was purchased subject-to the existing financing, and the previous owner is the only party liable on the mortgage – YES, this is considered a “financed property.”Ownership of a residential property, which is owned free and clear – NO, this is not considered a “financed property.”Joint or total ownership of a residential property that is held in the name of a Corporation or S-Corporation, even if the borrower is the owner of the Corporation, and the financing is in the name of the Corporation or S-Corporation – NO, this is not considered a “financed property.”Joint or total ownership of a residential property that is held in the name of a Corporation or S-Corporation, even if the borrower is the owner of the Corporation; however, the financing is in the name of the borrower – YES, this is considered a “financed property.”Ownership of a residential property that is held in the name of a Limited Liability Company (LLC) or Partnership where the borrower(s) have an individual or combined ownership in the LLC or Partnership of 25% or more, regardless of the entity (or borrower) that is the obligor on the mortgage – YES, this is considered a “financed property.”Ownership of a residential property that is held in the name of a Limited Liability Company (LLC) or Partnership where the borrower(s) have an individual or combined ownership in the LLC or Partnership of less than 25%, and the financing is in the name of the LLC or Partnership – NO, this is not considered a “financed property.”Ownership of a residential property that is held in the name of a Limited Liability Company (LLC) or Partnership where the borrower(s) have an individual or combined ownership in the LLC or Partnership of less than 25%, and the financing is in the name of the borrower – YES, this is considered a “financed property.”Residential property held in a REVOCABLE trust – YES, this is considered a “financed property.”Residential property held in an IRREVOCABLE trust and the borrower has NOT personally guaranteed the debt – NO, this is not considered a “financed property.”Residential property held in an IRREVOCABLE trust and the borrower HAS personally guaranteed the debt – YES, this is considered a “financed property.”Obligation on a mortgage debt for a residential property, regardless of whether or not the borrower has an ownership interest in the property – YES, this is considered a “financed property.”Ownership of a vacant residential lot, even if it is financed – NO, this is not considered a “financed property.”Ownership of commercial real estate (office building, retail space, warehouse space, etc.) – NO, this is not considered a “financed property.”Ownership of a multifamily property (consisting of more than 4 dwelling units) – NO, this is not considered a “financed property.”Ownership in a time share – NO, this is not considered a “financed property.”Ownership of a manufactured home and the land on which it is situated that is titled as real property – YES, this is considered a “financed property.”Ownership of a manufactured home on a leasehold estate not titles as real property (chattel lien on the home) – NO, this is not considered a “financed property.” 

Meet potential buyers and see what they will buy, #bed/bth/garage, location, price ranges, etc.Looking for buyers first means you tie up some 2bed joint that won't sell but you have a motivated seller, if you have no place to put it, you can spend a week getting it tied up under contract and three weeks beating bushes and no sale.

Both my wife and I are federal employees in the DC area, and have jointly made the decision to start investing in real estate as a means of gaining additional financial freedom and providing for our future family.We're currently living in Central Maryland, but are originally from the Southern New Jersey area, just outside of Philadelphia.

Last year, we jointly purchased a property (triplex) with an individual.

At this point, I'll only rehab if there is a healthy payday involved.

For $20K in an IRA, forget rentals, borrowing restrictions will keep you from getting to a dollar amount that makes sense, PLUS you really need to keep a healthy cash reserve in your IRA (I'd argue for $10K) to cover cash contingencies that might arise with your property (large new capital expenditure, tenant destroyed house, etc.).

Or joint venture and split the net profits with them on some worth while split to you (probably the best shot).

Start with the city/metro and make sure the economics make sense, and the housing market is healthy.

A Joint Venture may be a viable option, however; there are MANY things that need to be considered, many of which Mike H. brought up.

If this is not the case you're likely to have to advance the first part of the construction costs and get reimbursed after they send their inspectors out to verify things are done.Budgeting for the EXACT amount of equity required is often pretty tough and we struggle with this on all of our joint ventures.