Ever since I started listening to the BP podcast and doing some research on real estate investing I started learning ways I could make it work for us to afford to buy a house here in Santa Barbara one day.

Can you afford a new primary based on your overall financial situation?

I would have been able to afford this but wouldve drained my savings.

Can you afford to make the corrections after the closing, if you get it for the right price?

Once you know what you can afford, narrow down the neighborhoods you are interested in.

I can keep the premium affordable if I opt for a $10,000 Deductible.

Assuming the land cost was affordable and clear, what major financial challenges can come into the picture upon the decision to develop a small complex and is there a "play" these days for developing smaller complexes (30-40 units)?

Depending on if you itemize your taxes or not and if you can afford to be cashflow negative you may want to try for a shorter loan. 

As for affordable -- possibly tax foreclosures? 

My mil is in a tricky situation with downsizing and being able to afford a small home in an area close to family.