Each should be able to operate on its own.

This will create your new basis.From an operational perspective, you might want to touch up a few things on the place to make it more rentable. 

One thing to consider since you are a California resident investing is the compliance requirements for LLCs incorporated in California or operating as a foreign entity here - the rules here are different than most states.  

Currently I own a large real estate company and still get some great value out being in his inner circle of real estate operators. 

Anyone operating an STR in Logan Ohio willing to chat about their experiences?

So your 35% operating expenses makes sense and seem plenty conservative to me.  

I'll also add that Bonnie's group is a great resource with operators from 0-Bonnie.

Commercial Revenue Generating properties like office buildings, apartment buildings, retail centers, etc (banks call it "CRE" lending) are typically evaluated from their net operating income, not gross.

Mostly due to the fact my spouse and I agreed on her to have zero involvment in any sort of RE investing (and its our home) I think once you have a good 6-12 months of reserve cash (operating expenses for your own life saved as a back up incase things go bad) save enough liquidity to get the ball rolling on your first invesment.

The other is a smaller operation which does a lot of business in the specific neighborhood the house is in.