Hey Latonya, accepting out of state vouchers can increase your tenant pool and potentially increase your rental income, but it also introduces complexities like verifying voucher validity with distant agencies, dealing with unfamiliar local resources for the tenant and navigating potentially different eviction procedures in another state.

The whole appeal in REI was to maybe create a small business on the side with my spouse as a way to: eventually secure supplemental income, start building equity in RE and maybe creating a small business together in RE that would help us obtain financial freedom after hearing how risky things can be, I’m trying to learn: what are other RE investors doing to make money despite the risks around home repairs, vacancy, additional expenses (i.e property managers), etc.

How steady is your income? 

Based on what you're describing, I think your going-in criteria is definitely something that is strong *however* your goals may not match what current market reality is.When you say $3200/month payment - do you mean $3200/month before or after accounting for potential future rental income from your tenants in the other units? 

For instance if he says $20,000 in repairs I’m not that worried and will offer close to where I figured I could offer based on income and expenses.

SoCal CAP rates do seem to be 5% from the redfin descriptions I read on some of them.I'd much rather buy a 1 million dollar SFH in north county than a 1 million dollar 4 unit in a low income neighborhood. 

Depending on the situation you may find a quad as well that would effectively let you use 75% of the rental income from the 3 units you don't occupy.

You should both read Lend to Live: Earn Hassle-free Passive Income in Real Estate with Private Money Lending.

The 22 yo graduates from college in computer science and says he is working on passive income this summer-wants to code something that earns passive income.

If that is the case you will need to hire a property manager who will likely charge 8-10% of the monthly rental income.