I believe it to be a little Southern California hidden treasure for cashflow, mainly class C but if you know what you are doing its a really good option to invest locally in CA with decent returns.

I recommend that you find a trusted or recommended Mortgage Loan Originator (MLO), who can give you options for property-based loans (mostly investment loans) and they don't use your taxes but the P&L of the property.

I don't have any brand preferences personally (I use Fantasy Spas at most of my units but I'm sure there are alot of reputable options), but just make sure wherever you place it is built to handle that type of weight.

Hi David, If building long-term equity and scaling quickly are priorities, then option 2 aligns better for you. 

(This option would would not carry any debt, all debt would be paid in cash)Or keep our current house, rent it out, and cash flow NET monthly about $1,500?

But there’s another option that’s often overlooked: mortgage recasting.

Example; I am invested in a fund that does active option plays on Tesla.

My view is there is more protection on a wrap than a sub to and with the right disclosures and underwriting can be an alternative option. 

The first thing I ask is why am I Buying the property.I always look at the exit strategy first, is it going to be a rental, a lease option sell, am I planning on living in it.

I would finish 4/6 rooms down there with proper egress and optional ventilation.