Everyone has made me glad I joined this site.Would any of you be interested in knowing how this plays out?

You can avoid payroll by ensuring your structure your agreement with them such that they are a 1099 sub contractor NOT an employee (bes ure to get smart and play by all the rules!). 

Could be a good chance to find opportunities that could apply to your real estate investment business in relation to see what the City is demanding and zoning discrepancies that could play to your advantage?

My main concern would be living in such close quarters if the people renting the rooms turned out to be dead beats.

I don't know how it is with land lording there as I never rented my home that I had there out.. but I suspect the landlord has their rights.. the City I bought in Kelowna BC had tons of rentals so I know it happens  ( rent that is )  and boy the prices sky rocketed talk about an appreciation play.. wish I never sold my place but I did not want to be a distant landlord.. and I made 20k in a year on it with currency arbitrage and modest appreciation..

This is a long term play that will reward investors for as long as they invest in the area.  

A loud speaker and keep playing the  "Barney " theme song .

This at least keeps the option of selling the property in play.

However, investing in Southern California doesn't make sense to me and it is mostly appreciation plays.

I am dead set on entering the real estate investment game but like I imagine a lot of people feel when they are just starting out, I am not sure where to begin.