For tenants though they never get that they are paying for heat in their electric bill so you will always have that challenge.

Since I have a job not related to RE in 2014 I was planning on reporting on Schedule D via form 8949 and selecting (c); I think I'll be safe but would understand if IRS challenges me.

I've always known that this would be a challenge.

Get the biggest house you can afford and lock in the price.

I agree with Alok that it is easiest to find a mentor, but it isn't necessary.Over the years, the biggest obstacle to any new investor is themself.

My biggest advice would be to tread carefully, as there are plenty of war zones and just generally undesirable areas.

I guess my biggest question is what are some other investment options that do not involve lots of cash?

I am a skeptical penny-pincher by nature, and imagine the market in California may offer its own unique set of challenges in real estate.If I have to choose which types of investing interest me so far, they would be buy and hold, and possibly rehabbing.

That has its own challenges, but is doable.

Some have been sooooo smooth and others have been a challenge.