What usually kills the cash flow is the HOA fee and personally I don't like rules and regulations that are ever-changing that may restrict rental rights.

Lastly, I know all local governments are seriously considering regulating pools (and elevators) on STR properties the same way they do in resort communities and hotels.

In other areas they would need to be evaluated for local regulations, etc.https://encinitasca.gov/praduGood luck

With tricky and complicated regulations in Fannie/Freddie lending with COVID-19.

In addition, STRs in CA are at constant risk of regulations limiting them. 

There are some rules and regulations surrounding that, but so far, I think the government has been very lenient.

I did it but that was 15 years ago may be more regulations now days.

I took this as akin to tearing up toilets before the tax inspector comes by.You could do the research yourself but depending on the value of your time, I'd look for an architect familiar with the local regulations/codes,.... and pay him for his time to provide an evaluation of habitability of the basement.  

While there is truth to that in certain regards, it's tough to do that in syndication because there are strict rules and regulations that must be followed when raising capital.

I would start with calling your county and seeing what the rules and regulations are for starting/running a campground on your property.