Total value is around $1 million and rents are also around the 1% rule. 

Yes, you lose the value add upswing, but you also reduce potential money loss and time loss.

Multifamily DSCR loans are certainly an option (will be high rate with zero prepayment penalty), but would likely require it to be fully leased or near it

The Bay Area, in particular, can be daunting due to its high property prices and competitive landscape.

How did you add value to the deal?

First question- Is the transfer tax based on the appraised value?

Insufficient reserves result in vendor bills piling up, value-add strategies running behind schedule, and returns being reduced, so it's important to have a clear picture about how well capitalized or undercapitalized a deal is so that you can truly assess the risk.

It's a great location, high traffic visibility, high-growth area.

I guess I really just want to gain experience so I can provide value to others in the industry.

This is particularly important in areas with rent caps because you can suddenly find yourself well behind market values for rent.As for how much, that depends on your market and what rents are in the area. 10% is a lot and you may have tenants move as a result.