This could make improvements like bathroom additions more worthwhile.

- Is it possible and worthwhile to legally make the Duplex a Triplex?

Especially when you start to add in depreciation and other tax benefits, it may be worthwhile to consider.

What I mean by this is that if a multi family is cheaper than renting (ie, your portion of the mortgage is lower than renting in the area and it saves you money on your monthly housing expense, it might be worthwhile looking into even if the net cash flow is "negative").  

The downside is the fee is higher but probably worthwhile if I can purchase a good deal first.  

It really needs to be within an hour of Manhattan to make it worthwhile 

"So, it might be worthwhile having conversations with both, explain why you are likely to go with the other lender, and see what better offer they each come up with.

You can't look at their bona fides and just know who will be worthwhile to work with.

Overall, lots of good points and a worthwhile read.

Without knowing too much about the specific market (although it does appear Monterey and Santa Cruz are holding pretty strong) it may be worthwhile to consider selling if values are holding.