We are under contract on another right now, but it's an appreciation play.

Wouldn't the equity I have play a factor in this?

PLAY YOUR CARDS CLOSE TO YOUR CHEST.

I spent quite a bit of time in the Jackson area playing MRA, JA and Prep back in the day.

Through depreciation, particularly accelerated depreciation and bonus depreciation, you can typically offset all rental income such that there is no taxable income from your rental . 

Quote from @Gerald Wallace: I'm playing Devil's advocate and running your numbers through the worst-case scenario.

Note that California taxes capital gains as ordinary income (up to 13.3%) and does not conform to federal bonus depreciation rules.This post does not create a CPA-Client relationship.

Here are key factors to consider when searching for a reliable broker.A good private money broker plays a pivotal role in facilitating real estate investments, serving as a bridge between investors seeking capital and private lenders willing to finance those investments.

The smart play would be to build a two story wood frame structure on top of piers or concrete block in most cases. 35 feet is a pretty typical height limit in most neighborhoods, so depending on elevation you SHOULD be able to build two stories on top of the elevated foundation.

Right on cue, we see 0 to 1 at play from @Eric Carr.