I see it as robbing Peter to pay Paul, dismantling the west wall to repair the east wall, trying to cover yourself with a short sheet, cutting off your nose to spite your face, or kicking the can down the road... take your pick. 

Most tenants resent landlords, don't rub their nose in it.

Santa Monica is tough, you may have better luck in San Pedro or Long Beach, both are up and coming beach cities, but expect to pay through the nose.

maybe I should just follow my nose?

@Ryan Stevenson yes, you’re right, the areas you mentioned (College Hill/East Side/Fox Point) are known as “A” areas and are very high priced in this market.If you want to be close to colleges but not pay through the nose, you might want to look at areas around PC and RIC instead - though be careful, sometimes neighborhoods change rapidly and you can go from a B+ to a C very quickly (e.g., going south of Chalkstone toward Valley St).You can get a better price for properties in C areas, but you will pay for it in aggravation and management headaches.

Maybe your own friends and family, but that's about it.Look around at all the short sales and foreclosures for the last 5+ years: all the second position mortgages on those homes either were wiped out by foreclosure of the first position, or were paid a pittance in a short sale.So if you are lucky enough to find a hard money lender who would provide a second, you will pay through the nose: as evidenced by the terms they quoted you.

:)You do need to take extra care to keep your nose clean if you have a license and are also trying to do things like wholesaling but being an agent/broker doesn't prohibit you from doing it.Now don't try to wholesale your own listings or try to buy them yourself once the client's get desperate and would take a good investor offer.  

Having a plan and building your team will help you make much better decisions.That's my two cents; you'll have to take the nose dive and understand that sometimes your first deal isn't going to be the best deal, but you will learn so much more from the experience!

You estimated $30,000 and it took $30,000 on the nose. :-)RentSo instead of turning around and selling the property, you rent out the property.

Then when you factor in holding cost, closing cost, etc. the bottom line profit number really starts taking a nose dive.