The downside to this strategy is that I would have to pay additional closing costs.

If developers do not build additional housing units it is likely we will see rents increase on much older and likely inferior housing compared to what developers would have built.Major Housing Developer Pulls Out Of California

You can cost seg also if you desire additional write offs same as higher cash flow.  

You most definitely can go in on a Fourplex with 3.5% down, primary residence, living in one of the units, find out what purchase power you have, and what the rent rolls for the other units will be to determine your cash flow. 

We haven't been in a short sale environment in at least five years, and probably more, on any level outside of some small blighted neighborhood or over speculated concentrated area. if you can earn a living on short sales in this environment, good for you.

I only do LTR now and live everything about it.

Purchase price: $36,000 Cash invested: $50,000 Sale price: $275,000 Bought a house, fully intending on living there.

In addition, I don't want the mgmt co. to see my leases, as I don't think they have that right or need.

I didn't use any tools other than the MLS comps I have plus knowledge of the area from living here for 30 years. 

@Krishna Shah - we should chat live.