@JD Martin your place sounds like a slice of heaven and for almost free it doesn't get any better.I do live in my home that was a rehab but the growth and increased traffic has diminished the quality of life here.

You can get a credit tenant loan at much higher LTV's from lenders because they see it as less risk.With the seller holding back a second you can get in for not much down.Hit a CAP of 7 to 9 going in and with triple net sit back and collect mailbox money.The downside is rent increases are set in stone and may not rise as fast as inflation diminishing returns.Also you have to pay special attention to the vintage of the lease.Typically they go for 20 to 25 years total.A newly signed lease has more security after the store has been built than a vintage 15 years in.They could decide not to renew and when you rent out to the new tenant as a second or third generational space the price per sq ft will typically be lower.So with 2 million I would do some safe CAP properties and then mix in the distressed multifamily for aggressive growth.

Also would creating an LLC putting the investment property into that help diminish the concern about the new debt affecting my DTI for qualifying for a primary residence?

Had she availed herself of these services, the time demands for the program would have greatly diminished for her.The sole monetary issue in this is a charge for skip traces.

I know there is a point where there will be diminishing returns but every rental property I buy want it to be as if I was gonna live there, is that unrealistic?

The west coast markets have traditionally been appreciation markets, and if you are not forced to sell and can hold long term, risk diminishes.

I've seen plenty of improvement in some of Baltimore's better quality neighborhoods, but overall I'm not sure why DC's population has exploded while Baltimore's has diminished and the city has continued to deteriorate over the decades. 

There's diminishing returns at some point.

It will still diminish your pool of buyers at least some bit.

But financially putting 20% down would nearly diminish my bank account.