There are several articles that do an exceptional job of explaining who, what, where, why and how tax payers qualify for the ‘STR Loophole’ listed here:The Short Term Rental Tax Loop Hole: A Game Changer for W-2 Wage EarnersThe Short Term Tax Rental Loop Hole: What Investors need to know The implications on the Oregon and California Coastal STR market is a strengthening buyer pool for luxury rentals in the $750-1.5M+ range.

For appreciating CA properties this could easily be a 7 digit step up in value but i would think in all CA markets would be significant.  

It's people who understand that it takes effort to become successful, typically from CA at this point, and have a way of showing those characteristics, do best.

Quote from @Gamal Harding: Anduril Industries' Expansion to Columbus: A Transformative Move for Real Estate InvestorsAnduril Industries, a prominent defense technology company based in Costa Mesa, California, has announced plans to establish a new manufacturing facility in Pickaway County, near Rickenbacker International Airport.

Since you’re in CA go for appreciation vs Cashflow .  

Where's in CA?

Also keep in mind when I started funding investment rentals in 2002 for CA investors 100.00 a month cash flow was the goal and accepted.. and even break even or a little negative was fully acceptable in markets with historic appreciation..

The condo I'm selling in CA could sell for approximately $600k, and I was thinking of rolling that into 2 condo/townhomes valued at about $250k each, then doing DST for the remaining around $100 for the 1031.

are we talking Idaho Montana CA  NV type of remote ?

There is an abnormally low amount of new construction occurring on the coast in comparison to the demand and the existing inventory can be quite dated, especially for those coming from areas like California.