I can see an explicit exception in CA Tax Code § 17561 that says you can not use the qualifications in Section 469(c)(7) (Real estate professional) to render that income as non-passive, but I see no callout for 1.469-1T and, as such - as a non-CPA - I do not (yet) see a reason why we cannot follow the same rules for CA that we do for our federal taxes; e.g., if the business is not a "rental" business per tax code, we count that income as non-passive and offset other income (W2, etc) similarly.Does anybody else have some guidance (or opinions) on this matter?

Very likely no (how do you think this would benefit him?)

You have no way of knowing what your booking rate is going to look like going forward.

With no points to the lender, the rate would be 9.99% with a principal and interest payment of $2165.

Great tenant - no qualms. 

If the sponsor is lacking here there’s no need to go any further.  

These investments may be better than a mutual fund, but REITs miss most of the biggest benefits of owning real estate.

There's no problems living next to your tenants, just tell them your the manager NOT the owner to avoid guilt tripping.You have to analyze the deal 1) while you're living there 2) when you move out.

There's no reason to wait, call them now so that you understand the options.

No.