Generally, if you are out of state, you are at a disadvantage because problems will come up with these types of properties.  

Just curious what the advantages/disadvantages are to different property foundations.  

You hit on the major disadvantage of residential <5 units, vs. commercial multifamily >=5 units. 

Investing out of state puts you at an instant disadvantage as you're forced to use a manager for a 8-10% expense that local investors may or may not have to pay if you DIY.   

It will only put you at a disadvantage compared to other buyers and you will be tipping your hand showing inexperience.

Each room will be charged $500 a month for rent (so no immediate financial gain compared to the apartment I am in.)I was hoping on getting some clarification on some of the financial benefits of living in the property I am renting, as well as the disadvantageous (if there are any).Thanks! 

According to California Prop 13, property taxes cannot increase more than 2% in any given year, unless the property value falls and the assessed value is still below the Prop 13 cap.https://assessor.saccounty.net/Forms1/HowPropertyTaxesAreAssessed_chart.pdfIf you bought at a lower price than assessed Prop 13 value, then you may be at a disadvantage in paying taxes but you saved money by buying low.I will be closing on a Sacramento California single family home with studio rental property next week. 

There are many advantages and disadvantages with paying cash OR using leverage.

One disadvantage of the 1031 process is that it can cause you to make deals under time pressure, so be careful.

In a lot of cases these people live in areas that are so economically disadvantaged that getting some kind of disability benefit is the only realistic income available.