Also, since I bought mine in a rough D area, I already addressed most all of my major issues during the rehab because I bought the house for 18k and spent 12k on hvac, electrical, plumbing, etc.

Any expense that you spend specifically for the rental side, such a repairing the plumbing or replacing a light fixture, is expensed against the rental income.How you pay the mortgage does not matter. 

 $200/psf doesn't sound too extreme for San Diego.But when you say full gut, do you also mean all new electric, new plumbing, new roof and gutters?  

Starting the bathroom we found plumbing that needed replaced as it was not to code.

Them being the 3 mechanicals (HVAC, ELECTRICAL, PLUMBING) and ROOF.

I am currently on a 6-month digital nomad trip to scratch the travel itch now so that I can live in a house hack for the requisite year without going stir-crazy (well, maybe a few short domestic trips throughout the year if I find a good deal on a flight).

The only thing I legally have to sub out is the foundation and plumbing(I’m a Electrician)I don’t know how to estimate the cost of the build.

I am on the other end.....I work with a lot of OOS (domestic and International) in my market......helping doing a lot of different things

They come with plumbing and electrical already built into the home. 

It could be something legit like a single mom fleeing a domestic violence situation and staying in a shelter,  but I think more often its an indicator the tenant has other issues a landlord wants no part of.