I will be living in one unit and renting the others out.

Looking at Redfin's data, it is appreciating over time (probably more than $15,600/year), but probably not as fast as other highly desirable neighborhoods in the Bay.I previously lived in this home before I moved and converted it into a rental property.

As long as the city does not hammer the builder with connection fees  ( or waives them would be best) I can see this working well as long as folks will pay that much to live there and of course Schools will dictate how well it will do long run.  

I currently live in Puerto Rico ( US territory).

This is actually my Grandfather's property that I am trying to get him a monthly cashflow since he is now in an assisted living situation.

If your lease agreement doesn't prohibit driving too fast in the residential area of the unit, you need to have a landlord attorney in your state look at the lease you're using, because driving too fast in a residential area may be a civil or criminal infraction or may even rise to the level of endangering the lives of others (neighbors).

Also, the state of formation is likely where internal disputes would be brought among LLC members, so if you and a partner and/or spouse live in CA, you probably want to arbitrate in CA if the two of you had a disagreement.

Would like to get all your expert thoughts on what's exactly stopping me from proceeding with a Duplex deal :)  Need to know how do I avoid the "would I live here?"

There are a lot of sketchy people living as roommates, so you want to cast a wide net, screen carefully, and be patient.

I have properties in states other than the one I live in.