You will have negative cash flow and will only be able to rely on appreciation to profit....extremely risky.Additionally if plan A is a serious option for you then you are a very low risk investor and may want to reconsider directly investing in real estate and may be better off putting your money in a REIT.A investor, assuming they have the ability to move, would sell the CA property and move their money to where it can actually produce positive cash flow.

It has wide appeal and will never produce negative comments or reactions from buyers.

The former is a liability (expense), the latter is an asset (income producing). 

In addition, once you've freed up your equity in your current home and invested it in income-producing real estate assets, consider applying for a couple of FHA multi-family property loans (4 units or lease) which have competitive rates and low down-payments (3.75% at the time of writing this). 

We are now in "search" mode, we have created various versions of our own Cash Flow calculators, Cash on Cash calculators and have determined our goals for what we would like the house to produce in order for it to be something we would like to consider.

However, I've also read that they can be value by the income they produce through the gross rent multiplier (GRM) method. 

Identify similar properties nearby that produce income as a resident and as a commercial property. use those numbers to do your I=RV calculation, but discount the income to arrive at a conservative number.

My partners and I are primarily in the self storage space but will consider other income producing commercial.  

As of now at the basic level I am, my goal is to buy and hold properties at the residential level to produce a consistent cashflow.

If the later is your primarily focus I would focus on a property that produces healthy cashflow that aligns with your risk tolerance.Best of luck and keep us posted on your future decision!