I  recommend one tried and true strategy:
Sequential investing: Most traditional real estate investment books teach this method. From my own experience, and from people I learned from, this strategy has a very good chance of success.

Many younger people who came relatively late to the DC area probably have missed the boom in the last 5-6 years. Don’t worry, you can still start investing in real estate slowly. Sequential investment may take 15-20 years. Let me tell you a story from my good neighbor Mr. Tranh:

Mr Tran escaped Vietname in a boat. He arrived in DC area around 1975. After couple years in tech school training, he started to work for Montgomery county school board as a school bus mechanics. Don’t underestimate his blue colar background, he is very savvy when comes to making decision on real estate. In the mid 80s, real estate price was extremely high compared with his meager government salary. He spent about 4 years saving diligently to purchase his first house in Germantown. It was a townhouse. By the end of the 80s, he upgraded to a single family home in the same region. But instead of selling his townhouse like most normal people, he rented it out. By mid 90s, he was again thinking of upgrading to a bigger single family house about 3500 sqft. He was looking everywhere in Germantown at that time, the price was too expensive for him. Instead, he found the same kind of house in Frederick and moved there. Again, like his first townhouse, he rented the second house out. He spent about 8 years in Frederick, by 2005, he sold his Frederick house for about 350K appreciation (the price rose from 250K to 600K in 8 years). He moved back to Germantown and bought in my community and became my neighbor. He split 350K cash into 2 parts, one into his present home, another into a new townhouse, then rented it out. So far, he owns 3 rental houses plus his primary residence. All cash flow positive. If you happen to run into him in the garage fixing school buses, with grease all over him, you would never imagine that he is already a millionaire owning multiple houses.

This is a typical example for sequential investment. The investor lives in a house for 2-5 years then move to the next house, rented the first one out, then repeat the process until he build up a portfolio of properties. Because he always purchase the house as a primary residence, he can get the best terms from the lender.

This strategy may need 15-20 years to fully see its effect.

On the contrary, let me tell you another story about a Chinese scholar, Mr. Gu. He received his PhD from Michigan State in pure Physics. He also arrived in the US about 20 years ago. For one reason or another, he never felt safe about his employment. Especially after a big layoff in the mid 90s, he has been totally freaked out about the prospect of losing his job. I asked him why he never thought of buying a house in 20 years. He said that he has not been confident in his company so he’s been waiting for the situation to get better. I told him that despite his psychology of insecurity for his career, his actual lapse in employment has been minimal. From 1992 to 2007, he was only out of a work for 4 months. It’s hard for me to make him understand that his fear of job loss is more perceived than real. He blamed his opportunity lost to his bad luck. I think not, his mind set has been the real problem. Of course, I am too polite to point it out in front of him.

Comparing Mr. Tranh with Mr. Gu, the only conclusion I can draw is one’s fate is determined by one’s mindset. It has very little to do with actual income level, IQ level or academic degrees. Mr. Tranh is generally considered low-income blue colar. But due to his different mindset, he made himself a millionaire with financial freedom. On the extreme opposite of the spectrum, Mr. Gu missed all the chances due to his extremely conservative mindset.

Anyway, let me cut it short. Success really start from the right mindset, rather than complaining high prices and opportunities lost, think about Mr. Tranh.

*Disclaimer: I changed the name and omitted some details from the real individual. If your situation sounds similar to my story, think of it as concidence. I just happened to see so many Mr. Gu in Chinese community.