However, you can compensate for this by buying with a deep enough discount to account for the extra time and money.

One idea would be that you could build houses with detached garages and if the tenants don't want to pay extra for the garage, you could rent those out to people who aren't tenants. 

Renting to someone based solely on personal knowledge of them is a recipe for disaster and I've seen many Landlords get burned by coworkers, best friends, and family members.

I am fully aware of the extra paperwork and costs that come with LLC ownership.

I’m renting 2bd/2bth apartments in Redwood City for $3400, and yours is a townhome near google, I’m assuming with private garage plus the extra half bath. 

Sellers may only show numbers that will help them sell the property anyway, so it’s best to be skeptical of everything they show you and build in some extra expenses regardless of what the seller claims their operating costs to be.

Thanks @Tim Herman, what if borrower pays extra that goes into principle?

 There are many different ways to create a business model I would definitely make sure I understand all the laws and regulations such as fair housing discrimination fair credit reporting act and local property code before you go down this path you may be creating a lot of extra work in a lot of potential lawsuits and litigation if you’re not versed on the laws that protect tenants  I would just ask yourself what the goal of the reason you’re doing that is if it’s to save a little bit money or not deal with an incompetent property management company then you may want to change companies before you go through all of this work just as a side bar of what you’re trying to do

I was not sure if paying down the primary as well gives me any extra leverage because it is not a rental?

Initial cashflow if we rented the whole place out would be $150-200/month (plus potential extra income from occasional AirBnB bookings of the bonus room with its own separate entrance).