Any property gurus?

[FPV414]

Looking to make an entry in to the property market at the moment, as I've just finished taking care of some debts for the old lady. I don't want to make the same mistakes Mother dear did and end up owing a fortune on something that I'll make a loss on or no benefit in the future. She had a failed business venture for which she mortgaged the house.

Anyways I have about $400k to spend, and I will (technically, long story) have a deposit of around $80k (20%, to avoid LMI).

I have three options that I am considering. I really am looking to move out of the family home ASAP and my ideal location is Inner East of Melbourne (Toorak, Prahran, South Yarra, Richmond etc.).

Option 1: Buy a 1 bedroom modern apartment in the above-mentioned areas for around $370k (if I wait long enough I can find one for that I reckon). Cons with that is that you have no land value, will be paying body corporate and in future it won't appreciate the same as something with a bit of land value (or so I'm told).

Option 2: Obviously $370-400k doesn't buy much out there, so I was thinking I could just buy a property out near where I live (outer East, Lilydale area), move the old lady in to that, rent the old property (current house) out and that would cover most of the mortgage and the rest I'd put in from my pocket. Then I'd rent in the area I want to live I'm told the old adage goes "Buy where you can afford and rent where you want to live". I can't see any cons with this, except for the fact I'd be paying rent and a little for a mortgage - and I may have trouble to find a property in my price range.

Option 3: A friend has offered to buy a commercial property with me so we can tinker with cars etc. there. That'd be a good entry in to the real estate market and to obviously build equity off so that I can buy more property in future. Cons, unsure..

What are your thoughts guys? Bit confused as to which is the most productive path.

Any good forums or websites or reads anyone can link me to?

Thanks.