I'd imagine this would be cheaper than a lending club.com loan or HML.... but both are surely options!

If you are wanting it for asset protection reasons an umbrella insurance policy would likely be much better and cheaper.  

Keep in mind cheaper isnt always better.  

Once people get priced out of that area they start to look for cheaper places nearby.

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Yet the HOA and the 7 years of increasing home prices makes me wonder if should use the money to diversify or maybe just buy another property, a cheaper property in a non HOA neighborhood.

Through the wall is cheaper but an eye sore (for the neighborhood) and pain when looking for replacements.

Can be a % or 2 cheaper as the owner usually shows their own property.

The more they do the cheaper it is or should be. 

And, even roommates will want a 3 bedroom because it'll be cheaper for them to split the rent among 3 people than 2 people.I have a 2 bedroom that's the same square footage as a 3 bedroom in the same track so everything is pretty much the same except for the difference in number of rooms.