We wouldn't plan to sell the property anytime soon so I would think we could avoid the capital gains with it becoming our primary residence.Can you please elaborate on the partner idea? 

Hi @Sean Leahy - good direction, I've never considered this but now that I think about, whenever I've had some random rental/sale listings I've been approached by brokers who said they represent folks that are part of the insurance company's claim management process (e.g. their house burnt down due to an accident). 

Do you think risk & reward always needs to be symmetrical? 

What do you think?

I think your biggest issue with any "work-arounds" is going to be your legal liability and holding the proper insurance in case something goes wrong, which I'm going to assume you'd need to be properly licensed in order to be properly covered by insurance.

[1]    You might want to think about opening 2 FDIC insured savings accounts that have no fees.

I think we strayed a bit from the plan and probably put a little too much in.

With that amount of equity and being in CA I think you have a couple decent options1.

I think that is pretty cool.

They think it's unfair because they only shower once a week but can hear the upstairs neighbor showering twice daily.