A DTI (Debt-to-Income) ratio of 50% or lower, when including all expenses you pay/month, would be safe IMHO.

The only down side of the area is that all types of properties are more expensive.

Expenses: 1.

Way too expensive. 

SFRs in the Bay area are crazy expensive, the down payment and mortgage payment would be a huge gap to fill.2.

I do not know if any of the closing costs or construction expenses make their way to the working partner (e.g., if they're the selling agent or own the construction company, etc.)If all estimates go to plan, then the 55% net profit should provide an 18% annualized ROI for the $1M, but likely lower.

But conducting thorough market study and comprehending certain expenses in the St.

Stay financially disciplined and plan for unexpected expenses.

Are both taken out of the gross rental income before all of the other operating expenses or after you deduct the operating expenses?

Costar is exceptionally expensive as has been eluded to here a couple times.