Quote from @Christina Barry: You are correct.

Don't be afraid to purchase the lower tier real estate the second go around if you are focused on the correct fundamentals.

Fair return is calculated to determine if the owneris maintaining the net operating income produced by theproperty in a base year, subject to CPI-related adjustments.https://www.readkong.com/page/guide-to-oakland-rental-housin...2021 - GUIDE TO OAKLAND RENTALHOUSING LAW

Definitely not, if you don't pick a correct property at a correct price. 

You are correct, small multi listings in A/B markets are less common, but do come on occasionally.

I usually suggest to my clients the equivalent of 3 months’ rent held in escrow and double the daily rent rate to be charged in the rent-back agreement starting after agreed upon move-out date if they are not out, with seller maintaining all utilities and repairs on appliances and systems until move out, especially if you’re planning to renovate, anyway.

I just want to be sure I write this out correctly in the request for repairs form.

( Not sure if that's the correct terminology.)Whatever loss I take in the first year against my wife's income, does doing this change my rental income from being passive to non passive income as well?

@Jhamari HoganJason, is correct.

An LLC is not necessary, but there may be benefits if you understand what you are doing and do it correctly.