Finding these deals and being involved will take a lot of time and college has the risk of adding heavy debt.

In your case, the competition from cash-heavy buyers is driving prices beyond what makes sense for a commercial loan based on current NOI and DCR requirements.As for your dilemma, I’d recommend sticking to your numbers.

I would disagree with number 2 - in this environment, heavy rate buydowns are a common tool in the toolkit for lenders and borrowers to make deals work and are in no way indicative of "not being well-capitalized"

STRs have platforms that do much of the heavy lifting to advertise your unit once you've set everything up.

The other "economical" areas are going to be more management heavy (think cheaper houses that are expensive in the long run) and the A/A+ neighborhoods will be very difficult to get cash flow (think Elmwood Village or Hertel Ave duplexes that are $350-400K but gross $3600/mo on the top end). 

Also just replaced carpet and painted the walls because there was water intrusion from heavy rainfall.

Hire one that is heavy into STRs.

This is a cash heavy venture even with a loan.  

For hardwood, that will take much longer and I'd bet they'd walk on it or move heavy furniture before the top coat is cured and damage it.

The Bay Area is going to be an appreciation heavy market.