The 80/20 split you're proposing, shifting to 70/30 and 60/40 as IRR hurdles of 14% and 15.5% are met, aligns well with common practices.

Purpose of the Leasing Management Program The primary purpose of the Leasing Management Program is to regulate and monitor leasing activities within the community. 

San Diego is expensive to Purchase, maintenance and cap ex is expensive, property tax at purchase is expensive in terms of dollars (average SFH prop tax at purchase is ~$1k/month in San Diego), new retail (MLS) purchases are negative cash flow when allocating properly for expenses, it is tenant friendly in terms of regulations but this is largely due to the big advantages LL have due to crazy low vacancy rates.  

Understand the demand, seasonal trends, local regulations, and competition in the area.

In other words, these sources claim that you can't buy a property solely for investment purposes (like renting it out) without living in it yourself.Is anyone familiar with this law or regulation?

New unit construction cost's are at/near all time record highs in terms of production costs (labor, material, regulations, tax's etc.).

Is this common practice to close a deal? 

For older demographics, consider the availability of medical centers, entertainment, and restaurants.Buildings/Permits: Assess the city's growth compared to previous years.Determine if the city can accommodate future supply.Government Regulations: Examine the city's efforts and the type of businesses they are targeting.

I think Lending Club or similar is becoming the most practical decision for us at this point...

Hey Fisher,Yes, you can live in your garage and rent out rooms in your house, provided that the garage is properly converted into a habitable living space according to local building codes and regulations.