If you are considering MFH in San Diego, hopefully (1) you are working with an astute agent who has or can address these issues. 

I've worked with clients remotely several times without issue. 

Once you have a handful of units, things become more stable because you gain a lot of experience and also when issues arise at one unit, the other units still carry the expenses.

Someone recommended not renewing to the family members as it can become an issue.

The numbers work, but it seems the issue was me as a borrower.

so...Again, lots of issues to work through when trying to use a single family into a "mini-dormitory."

I am concerned though about vacancies and potential issues with finding decent property management.

I’ve been reading up on it as I have a water bill issue from before I bought the house.

That's one of many options.Once we figured out that the issue for us was more the lack of cash flow and less about the investment(we knew what we were going to spend either way) we paid 90% cash and that solved that problem. 

One issue I've run into is that some collection agencies don't report tenants to the credit reporting agency, which is a huge missed opportunity.