I anticipate serious cap ex expenditures coming his way. 

They already lost some major players due to the state capping rates https://www.foxbusiness.com/lifestyle/california-insurance-c... will all insurance companies stop coverage, raise rates or reduce what they cover?

Most nearby cities are the same.Even in the Denver-adjacent cities that do allow non-owner occupied STRs, they vary widely -- some have caps on STRs, some cap the nights rentable as an STR, some cap the number of vacation rentals one owner can have, etc. etc.This is all to say, first know where you can do Airbnb, then start running numbers.

Sounds like you are going with a Fannie/Freddie type loan based on the cap of 2%.  

Conventional loans will require 12 months seasoning for cash out and are usually capped at 75% LTV 2.

The City/County/State rent caps only apply to leases that are being renewed. 

It's not difficult to find tenants if the property is marketed correctly.

The plan is notorious for minimum insurance and they were previously capped at $20M for larger commercial and HOA properties.

Purchase price: $4,100,000 Cash invested: $2,000,000 79 unit value add apartment complex with roughly 800k in cap ex completed What made you interested in investing in this type of deal?

., Purchase Price: $475,000 ($197.9/sq. ft.).Estimated Market Value: $402,000 ($168/sq. ft.).Financing Terms: 2% interest rate, with a 9-year balloon.Unit B Income: $2,049/month (Section 8 tenant through November 2025).Unit A Income Potential: Similar rent or higher; Section 8 cap for the area is $3,234/month.Monthly Loan Payment (P+I): $1,386.Cash Flow Breakdown (if both units are rented at $2,049/month):Gross Rent: $4,098/month.Vacancy (10%): $410/month.Operating Expenses (37.3%): $1,376/month.Net Cash Flow: $943/month.Key QuestionsWould you be comfortable paying an 18% premium for financing at 2%, especially in a market where current mortgage rates are closer to 7%?