In terms of giving away equity; I am not sure if this is too far down the road, but getting long term debt on the property is a consideration as an exit.

Taking into consideration the WC,GL and him most likely getting the subs and materials cheaper than me definitely make it worth it.When you speak of turnkey GC's are you speaking of GC's that handle everything basically from start to finish and charge you their 10-15% fee at the end?

Considerations we've heard/read about are: distance to primary residence, location of the property in comparison to the primary residence (ie, if we live by the beach and we buy a property by the beach, it's likely not our vacation or second home, whereas living inland and buying in downtown or by the beach could be a more likely second or vacation home), and minimum timeframes for owner occupancy (like 14 nights if we eventually choose to do STRs there).We live inland and if this does allow us to buy at a higher price point, we're open to looking in more tourist-y areas of the city.

@David Thompson Thanks for the reply, yeah I've read quite a few books on the subject by various authors, Phil Pustejovsky, Brandon Turner, Mark Ferguson etc, and spend a considerable amount of time here on Bigger Pockets as well.

The local HML can usually pull the trigger much faster than an outside person does because more research has to be completed to asses risk in lending for that area.This is why local HML lenders rates might be lower than a national HML lender that prices a few percentage point higher and one to two points more to price in the unknown factor of the area.

If you add to the title, you may trigger a new accessed value losing that low property tax basis. 

. $240k is priced to trigger a bidding war, I just am not a fan of the neighborhood.

I thought that was the whole point of gaining considerable equity in these properties, to leverage them with a HELOC and then acquire more property and/or rehab existing ones? 

If the conversion of use doesn’t trigger any depreciation recapture or other negatives, then I could theoretically: buy a home, rent it as an STR for one year, claim all my bonus depreciation to offset W2 income, and then covert it to an LTR year 2.

Before proceeding, I am seeking your expertise to evaluate whether this investment opportunity aligns with sound financial considerations.