As emphasized before, your first "investment property" should be your home. One of the major reasons is that owner-occupied residences are the easiest to finance.

Another big benefit is your capital gain resale profit will be tax-free up to $250,000 (up to $500,000 for a married couple filing jointly in the year of home sale). Internal Revenue Code 121 requires principal residence owner-occupancy for any 24 of the 60 months before selling for tax-free profits up to the limits.

You can use IRC 121 over and over again without limit, but not more frequently than every 24 months. If you are willing to live in your home while it is being renovated to increase its market value, you can earn up to $250,000 (up to $500,000 if you're married) tax-free every 24 months. Please see my special report, "Everything Homeowners Need to Know About the New $250,000/$500,000 Home Sale Exemption Rules," for details.

There are so many ways to finance the purchase of your home, I don't have space here to explain them all. My personal low-cash favorites include (1) lease-options, (2) seller financing, and (3) FHA, VA and PMI (private mortgage insurance) mortgages. More details are in my special report "Secrets of Buying Your Home or Investment Property for Nothing Down."

As emphasized throughout this report, even when buying your personal residence, look for profit potential. If you purchase a home in tip-top near-perfect condition, it has little profit potential. That's the way to SELL property, but not the way to profitably buy it at a bargain purchase price.

Following the old Nickerson formula, look for homes (and other investment property) "with the right things wrong." Cosmetic improvements are the easiest and most profitable. Aim for $2 of increased market value for each $1 spent on improvements.