Hey Fisher,Yes, you can live in your garage and rent out rooms in your house, provided that the garage is properly converted into a habitable living space according to local building codes and regulations.

New unit construction cost's are at/near all time record highs in terms of production costs (labor, material, regulations, tax's etc.).

Being that I am do not in incorporated Palm Springs, I do not fall under the city's short term rental regulations.

I'd do it as an STR, that way when permits/regulations come in you can be grandfathered in.

The operator will raise the capital and then go buy numerous assets (notes).

It is updated every year to comply with the new Chicago rule and regulations (residential landlord and tenant ordnance). 

When looking at SFH check city and local regulations and look at recent meeting agendas if STR restrictions are on the horizon.

They have all run businesses there and complained that they could no longer compete with the larger companies due to the cost of regulation. 

Given this, the city of San Antonio has changed their short-term rental rules and regulations.

There have been numerous books written by people claiming to have the “magic” formula to sniff out future values.