However, before you do so you should ensure that your revenue from rental income covers ALL your property expenses in the townhome, including mortgage, taxes, insurance, maintenance/repairs, vacancy, property management, etc...

In category after category, larger condos and higher price ranges are selling better than smaller condos and lower price ranges. 

Typically, the adjustments I see on appraisals for basements are more flat rate adjustments. 10k is usually the number I've seen.What stinks is that there are a couple of model types that have below grade space where the builder, I'm sure, was trying to lower the taxes by having it below grade so the county wouldn't count that space in the assessment.

Pete area  after the recent hurricane and was hoping to get some real, boots-on-the-ground insight.

They pay rent before the due date, clean the property after every client, and if something breaks they usually repair it before I'm aware because their clients will give them bad ratings.

BTW behind Texas.When all forms of taxes are calculated (income, property, and sales tax), CA ranks below the middle of the nation in total tax rate.  

Also is there a plan to replace the HML after a particular point?

One challenge was getting the hotel occupancy up after renovation since no one had booked or stayed in years so there was no existing guest base.

They refund 2300 back after the first successful deal, and do not require that fee up front for future loans. 

In California there is $800 franchise tax per LLC per year, which discourages a lot of RE investors from getting an LLC.