Now I am looking to shadow an experienced investors from the Pittsburgh area before I start making deals and try to limit some mistakes that come with investing in real estate.

Based on my experience, the Fannie Mae DTI ratio limit of 36% is not so restrictive.In your scenario, you are expecting to live off of $5k a month ($60k) a year and that does not take into account things like maintenance, repairs, PM fees, etc that will eat into your passive income.

The property in question is a SFH, needing new flooring as a major repair and also several minor repairs such as hardware, cracked tiling.

A trust does not limit liability but it does provide anonymity, which may be just as important.

The sky really is the limit in real estate.

Flippers and rehabbers get a stable source of funding that can scale (in theory) infinitely as they grow, and investors get a chance to earn stable, decently high returns - with limited downside in the case of well-collateralized land or development projects.Just my observations of the industry so far.

FHA has a lot of limitations when it comes to specific rehabs while FNMA HomeStyle does not. 

Im assuming there are limitations or downsides that I'm not aware of.

@Jay Hinrichs is San Diego within the city limits?  

I know for limited capital investors or limited credit investors its a tool they like.. but its really bad for a seller unless the sellers' credit is already trashed and their is no equity and they were walking anyway.. and its a purchase money 1st were no deficiency judgment could be obtained by the lender