I'm familiar with the concept in terms of making an investment/financing decision, but I'm struggling to understand why you factored it into my theoretical ownership interest.Here is what I am thinking (probably incorrectly):  My sibling should consider their opportunity costs when determining whether to bank roll this project, because maybe they can do better elsewhere.  

That is something I have been struggling with.

The level of competition is deterring and leaving me struggling to get started. 

I am also open to moving to areas around Minneapolis as well, initially I thought we would struggle to save up enough for a down payment in those neighborhoods but we have been fortunate enough to land good jobs out of college and we have enough to put at least 10% down (with 6mo cash reserves) in almost any neighborhood and we will save some more before we move.Thanks in advance!

Hello!
If you’ve had success with REOs, Can you share your success and pain points? 
REOs seem like a super secretive, magical RE topic! :)

The good news is that we have a bunch of equity in our home now (~$400k) which i'm debating pulling out to purchase a duplex/triplex with, but I'm struggling with how to do that (insert LLC questions, financing questions, rates, cashflow, etc).

The added advantage that you will have if you do it yourself @Minji Kim is that you can advertise your rental as NO BROKER FEE - this opens up your tenant pool as many people struggle with coming up with all the cash needed (in NYC: 1st month rent AND security deposit AND broker fee).The broker fee is usually 1 month rent, so doing it yourself should help attract more people (as long as you don't charge a broker fee).

They tend to pay attention to things like this.I also believe that with my current business model, the fact that I do all my own maintenance means that I can provide something many others struggle with.

If they struggled to afford a $300k house a year ago, and the median wage hasn't increased, could that indicate it is close to plateauing now at $400k?

If you are struggling to get sufficient bookings to achieve it, I would lower the price and go out of my way to make sure everyone is happy and leaving good reviews.