Just make sure your deal is in a great area that way the appreciation in the area (which is always a gamble) could help you refinance out into a conventional loan at some point.

My primary focus is cash-on-cash return, and I personally have no interest in gambling on continue appreciation or rents increasing at the rates they have the last few years here in Denver.Looking forward to hearing from others on this topic.Thanks,Marc

At the same time, with price to rent ratios so low, how is anyone making a decent return unless their low expense estimates are truly accurate (which I know, is a gamble, right?).

So could go from bad to worse, it's a gamble.

This feels like speculation/gambling not investing.  

But that is an expensive gamble that I would not take with my business.  

REI is a lot like playing poker, and not because they are both gambling. 

If I were a gambling man Mike, and I were looking at CT, not just Hartford, from 3,000 miles away (with limited direct knowledge and experience), I would bet that when CT finally turns over to a more business friendly climate (ie, oust the liberal - long held democratic views), we could be just like you in CA :-) In fact, if I recall CA was in some major trouble 10-15 years ago too, and now look: 2016 San Fran became the very first area to have average home prices over $1 mil. 

I wouldn't recommend going into someplace that has no policy concerning STR, as it's a huge gamble.

The cash you can "Throw at this" will probably figure into it, unless it's some type of high risk strategy where you have to do X a lot times in hopes of getting result Y (in which case it's more of a gamble than an investment).And as Kenny Rogers said in "The Gambler", "You never count your money when your sitting at the table".Kenny Rogers "The Gambler"But if you are gambling, then realize that sometimes gambles pay off and sometimes they "Crap Out".Good Luck!