Also, when not occupied, the PITI on a high-end home can quickly erode prior cash flows.

Assume an FHA loan to non-occupy and use for rental real estate.... 

It could be some sort of skill set for renovations, design for furnished rentals, specific market knowledge, owner occupied loan products for a house hack, etc. 

For example in many jurisdictions I can STR units in a duplex but cannot STR an ADU (some jurisdictions will let you STR if you owner occupy).

Trump has said he plans to keep owner occupied rates at 6% through 2026.

A B class rental here is probably different than a B class rental in your area as is the profile of the tenant that occupies it.

Some DSCR lenders will do it based on expected rent but still, they would not want you to be doing an owner occupied home with their loan.

and if you buy something that's occupied and needs work, again, it might be a great opportunity. 

In California, a tenant is considered an “at will” tenant if ALL of the following conditions are met: (a) the individual occupies a property, or room within the property, with the owner, (b) there is no agreement for the occupancy to be for a specified period of time; AND (c) the individual occupying the property is not paying, and never has paid, any rent.

If you're tax bill is $6-8k (minus the 1031 fees), surely you can make that up by taking multiple swings over a longer period of time.OR pursue some sort of owner occupied strategy with that cash if you can swing a live in flip or house hack.