If they’re underfunded, you could get hit with special assessments.Not sure about the exact contract with the tenants, but I assume if there is any additional assessment, it would be tenants’ responsibility.Since you want to stay local and focus on cash flow, commercial makes sense, but have you considered industrial or flex space? 

In southern CA, even garage conversion ADU additions are typically costing more than the value added.  

It’s inexpensive to provide but can make a big impact.Comfortable Bedding: Investing in high-quality mattresses, pillows, and linens improves the guest experience and leads to better reviews, which can boost occupancy rates.Smart TV or Streaming Services: Offering Netflix, Hulu, or similar services is a low-cost way to enhance guest entertainment and stay competitive.Fully Stocked Kitchen: A well-equipped kitchen with basic appliances and utensils appeals to families and long-term guests, saving them money on dining out.Dedicated Workspace: If your property caters to remote workers, adding a small desk and ergonomic chair can set your listing apart.Outdoor Spaces: If your property allows, an outdoor seating area, fire pit, or hot tub can significantly increase your nightly rate and attract more bookings.Energy-Efficient Features: Guests appreciate eco-friendly options like LED lighting, smart thermostats, or solar panels, especially in eco-conscious markets.Keyless Entry: A smart lock is a relatively small investment but offers convenience and security, which many guests value.If you’re deciding on amenities to add, it’s always a good idea to research your local market.

I’d recommend a consultation with an attorney specializing in these, in addition to an accountant.

Additionally, I am beginning to believe you don't live there to be the "house monitor" as this seems to be going on for a time period. 

If you have any additional advice please let me know!

Additionally, confirm the transfer won’t lead to property reassessment, which could increase taxes.

They countered and we met them in the middle at 15% under, and then negotiated an additional $15k off during inspection, so total discount was around $150k off list price/ what they paid in 2022.

Quote from @Nick Am: @Michael Plaks--> The SE taxes are STRICTLY NOT in addition. 

Are there any additional considerations?