Imagine the 2nd property is a 4plex, each unit can be rented $1500/unit of 75% =$1125 x 4 units =$4500 worth of income to offset your that 2nd property.

I imagine a lot split would also significantly increase cost of utilities as now I would have 3 hookups in that scenario.I am also concerned what would happen to that sweet 3.25% 30 year fixed mortgage I have, which I don't want to create any risk over in the slightest.Any advice on how to frame my counter arguments would be incredibly appreciated.

But, I would imagine he'd be a pretty good tenant because I'm sure it's pretty difficult to find a place to rent being a sex offender.

It's much easier to rack up  material hours if you are nearby and able to take on some of the timely hands-on work yourself.I imagine that others have tried to do this while OOS investing but I couldn't speak to their success (or lack thereof)

Could you imagine the hell that would wreak on international markets!

With that said, I would imagine there would still be some form of shielding from your personal assets but whether or not this set up makes you an easier target is an interesting question. 

Some say they are the same, others will exclusively do one or the other, which would lead me to think they are more different than first imagined. 

I don't know what the market like is in SoCal but I would imagine that contractor costs aren't much less there in LA area than the Bay Area.With @Dan H.'

As you can imagine, it drastically cuts down on the amount of water use when the tenants have skin in the game.

I would imagine putting language in the rules about tampering or removal is a fine similar to how hotels do.