On the other hand, the economic factors like interest rates, affordability, and supply could make the sf home only increase in value in the short term. 

I can't afford to refinance it into an investment type loan because not only will it be more in interest rate but also my down payment has to be a lot higher and my monthly payment will be higher in which case I can't cashflow.

However If you can afford to do that, that works too! 

In the worst case scenario with a ban, the property wouldn't cash flow that well (a few hundred negative).I am comfortable with that considering this scenario still cash flows better than most other housing arrangements I could afford in this market.

@Brian Garlingtonhe sounded like he likes the house, landlord, gardener etc, and he said i have lots of furniture etc and would like to stay, he is inclining towards finding a new roommate.but I would prefer him to leave. so how to inform him in a way he leave the place nicely.

However, could this be an opportunity to make buying a home more affordable?

Almost all of them either went out and bought properties that they could personally afford to start off or they invested with another GP and asked tons of questions to figure out what to do.

If this isn't the case, it seems very odd to pay 50% over FMV for a property, even if the numbers do work out- and that means too I think that it's affordable?

This property was in our purchase price range that we could afford a 25% down payment.

The only way it works out is if you can get a lot more rent for her living space than she can afford.