It comes down to setting expectations; did any of the applicants provide specific, detailed reasoning for backing out? 

It is probably true that it is easier to find out of state, but it is incorrect to say that it can't be done in CA or more specifically in the Bay Area.

However, the law also requires you to make a reasonable effort to find a replacement tenant.

Get clarity of your true financial situation and any hidden earnings potential3.

I never agree with appreciation as a reason for a poor performing STR.

For that reason, I focus on looking at investments with value-add opportunity, and thus turnkey properties are less attractive to me.My metrics, then, are typically if my purchase price, remodel costs, and holding costs are less than 70% of the After Repair Value, it's a good deal for me!

Which is kind off too good to be true! 

There is not the risk of HOAs changing the rules like in other locations, it's a true vacation market with very few full time residents. 

Passive income was one of the biggest reasons for my second acquisition, I am trying to build a nest egg for my future self.

You haven’t said what amount the rent is but I’m sure it’s not NYC prices and reasonably between 6 adults if they’re working even part time jobs they would likely be able to come up with the rent.