See responses to your questions below: Correct, California is uniqueTo qualify for REPS you need to meet a number of criteria, including (but STRs that meet IRS criteria generally don't need REPS to leverage tax benefits): More than 50 percent of his/her time working in real property businesses; AND, More than 750 hours of service during the year.

Unless new companies move into the city and create replacement jobs, all that will remain are lower-paying service sector jobs.

First all, thank you for your service and kudos for making that sacrifice to househack it's definitely paid off!  

Key items to rehab on the second home to bring the property value up for the refi, determining which lenders/servicing companies will be favorable, Identifying good properties to invest in altogether.

When a rental is taken out of service for personal use the accumulated depreciation goes away over a short period of time. 

Make sure to verify any information from a party that doesn't have any advantage of you getting their services before making a decision.  

You cannot deduct your rehab costs until the property is in service. 

This means you need to pad your rehab costs, make sure you have trusted service providers that do great work, and when you run comps be sure to bring them down a bit and see if the deal still makes sense. 

If a person has to ask, at all, I STRONGLY advise to use a PM service for tenant placement. 

It's a great framework to get started from a tactical perspective.