This is a risky proposition for the lender but I've seen it done. 

Second, I think now is a great time to start looking for your first house-hack, especially with 30 yr rates being at or near historical lows.My opinion, perhaps biased, since I'm a house-hacker myself (and NJ real estate agent) is to focus on buying a MF to house-hack, as opposed to doing a flip (already a risky proposition, but even riskier now) or investing long-distance, since you have no experience or an out-of-state network or "team" you can partner with or trust.Meanwhile, as house-hackers, you can put down as little as 3.5% with an FHA loan, and can probably get your net housing costs to be lower than your current rents. 

The key value proposition of a turnkey provider is simplicity. 

Here's why: 1) You can articulate clearly without anyone else in the way what your value proposition is and WHY you're offering a low number2) The listing agent gets two sides of a commission3) You're not getting 'hearsay' about the seller or agent.

With the price of materials today, I suspect it's a winning proposition.

I've often heard people say, the California market is different, you wouldn't expect great cash flow or returns, and the investment is more about long term capital growth, in which case the conventional calculators are less applicable.Can anyone suggest how I should analyze such a proposition to ensure I'm not committing financial suicide?

Understand your value-add proposition and IRR computations, inside and out.

Once they're qualified you engage with them and work on convincing them that your value proposition fits with their investment goals. 

If you look for these types of properties, you can probably find something you are uniquely qualified to handle.As far as building new, that too can be a very lucrative proposition.

I could've rented the SFR to a maximum of "three unrelated people" per zoning and probably grossed $900 on $30k of renovations and 250 hours the work.Modern building codes and zoning ordinances make this an incredibly difficult proposition.