I am curious about commercial versus residential though and you make a good point.

Passive income can help you pursue your real passion, but who knows, you may become passionate about aspects of real estate:  providing jobs, improving communities, the big checks, the tax savings, or the travel?

Investing 20-25 percent of your own money provides some equity which helps cushion the leverage (in addition to any improvements you make to force appreciation) and it eliminates the need to pay private mortgage insurance.

NNN versus gross lease3.

Be talkative and use it as an excuse to leverage your current environment.At the end of the day, money spent on self-improvement usually is never a bad investment. 

I plan on wrapping it in vinyl siding next year, which should greatly improve the outside view.

Our goal is to purchase an REO to rehab, live in it for a couple years making small additional improvements, and sell it for a profit.

I'd like to get an FHA loan to do a cash-out refi and use the money for home improvements, some minor debt pay down (mostly to raise credit scores) a cushion for starting my real estate career, and ultimately buy a new house and convert the current one to a rental.

You could still do a modified or slower approach to BRRRR by looking for value add multi's that need economic and/or physical upgrade that you can do as tenants turn over and improve the quality and value of the property over a year or two but still with ongoing rent/cash flow. 

I'd rather spend a little more money to protect, preserve, & improve my long term investment, keep tenants happy, & justify higher rents.