As @Taylor L. stated, the sponsor's track record is the first step to evaluate.

My personal preference having thoroughly looked and evaluated houses in both markets, is Arrowhead.

Most important is to learn to evaluate the deals.

This leaves bridge as a more viable option than perhaps CMBS or recourse bank debt.As to the take-out risk:  Sponsors (and their investors) should be evaluating how much "lift" the value-add improvements bring, both from a cash flow perspective and from a valuation perspective. 

A lot of the house hacking articles/blogs I've read frankly do not get into the level of nuance I'm looking for to properly evaluate the %/square footage split question.

You'll also need to evaluate asset protection strategies, LLCs, insurance protections, trusts, etc., as you don't want to expose that much cash to risk of lawsuits and other risks without having tools in place to protect it. 

When I'm evaluating a sale I usually look at this 4x exchange rule that I honestly think I just made up for myself.

@Eric Lopez In addition to analyzing the deal you have to evaluate the tenant.

Given that point, and that we are entering the slow sales season, I think you should seriously evaluate your hold period.

Any suggestions on how to start evaluating properties/locations?