We negotiated a deal with the owner for 20% Equity, we are responsible for infilling the community as well as property management (which we also get paid separately for).

Self managed HOAs are usually undercapitalized so you want to take a thorough review of the condition of the community to make sure there isn’t deferred maintenance because you might get hit with a special assessment if the board isn’t setting aside cash for those capital improvements.At face value, taking into consideration my typical financial objectives, I wouldn’t do this deal unless it was a much lower price.

It’s the simplest way to get a feel of what it is like to be a landlord without going through the hassle of managing rehab projects.

In addition I heard that is better having one LLC for each property and one for management only.

Property management is also in place. 

I've managed a number of successful rehabs and put a lot of sweat into them as well.

5unit is probably manageable.  20 unit is work I would think. 

The same question is analyzed every day by millions of businesses, investors, wealth managers, financial analysts, and corporate treasurers world wide.

Even if you create a non-CA LLC, if you are managing the business from California, you will likely be deemed to be "doing business" in California and therefore likely subject to CA taxes.

Investing in real estate in actually starting, managing, and marketing a company.