I would recommend consulting with a tax professional to gather more details to confirm this based on your situation.

@Felicia JenkinsI recommend going with a long term rental.

Quote from @Andrew Betts: Hi Michael - We own and manage homes in Solara, I can recommend it for a strong ROI, and there is full access to the clubhouse, and better quality food and drinks there, than at other resorts. 

Hey Jon would recommend checking out FB groups if you aren't local (looks like you're based in the Bay).

I plan to use a HELOC but would be interested in the thoughts of others in BPs on this approach or recommendations if there are other ways to financing that I should consider.

I recommend you include some of your key qualification criteria in the advertisement.

I'd build up and go for at least 2 units but 3 stories is better. 3 story walk up apartments account for almost 65% of apartment developments round he country. this is what I'd recommend on your lot. this is 35' tall and we do it in columbus oh 

I would highly recommend talking to Jeff Weller at Coast 2 Coast and Fernando Corona both are also PadSplit hosts but we're some of the first expert lenders .

I'd also recommend you have a good relationship with an investor-focused Realtor that can connect you with a solid Property Management company, etc. 

I do not recommend someone who has never owned real estate to do a fix and flip as real estate is challenging and cost prohibitive, I recommend if never owning real estate to start with an asset that does not need major repairs.