I'd also advise out of state since you can certainly generate better cash flow too. 

@Ricky RigsbeeI got the analyzer and it does a good job assisting you with your underwriting and the different scenarios you can generate for comparison.

They tend to cost more to construct then they add in value, they are generally more valuable for a property you are holding as a way to generate more income.

. $185k revenue. $100k expenses.

The ability to generate more income for simply the cost of a building is another huge cost saving over buying an expensive commercial lot and developing it.

I would just take into account that a lower down payment will mean a higher monthly payment so be sure to run the numbers conservatively in order to ensure your STR revenue is able to carry your monthly payment with this higher mortgage cost. 

It would actually be a net PROFIT given the huge increase to tax revenues. 

@Andreas Mathews admirable, but make sure you do some research so you understand what a PM can make.Starting your own PMC business will require 75-150 doors to make a decent living, depending on gross rents and your fee structre.Working for a SFR PMC as a PM, will require a RE license and you usually get paid a percentage of the gross rents the portfolio of owners/properties you manage generates.

Things can and will go bad, but once there is enough monthly cash flow generated it will be extremely difficult for that one big issue to put us away or even 2-3 big issues all at once. 

Has CA never heard of generators?