Even worse, if your "about 4.5%" interest rate proves to be not conservative enough.Extrapolating your idea, if you did this every time you moved, you'd always still be looking at negative cash flow while they were being built, and likely while you were living there.I worry that somewhere along the way, you'll be taken advantage of by your building contractor/s, who might start seeing you as an endless source of guaranteed dollars.People tend to not be as careful with their money as they should be, if too readily available. 

I couldn't care less if one tenant pays all the rent or if they break it up into 3 pieces.

Who cares about interest because it will be small with just a few days on it.

Be careful and please do your due diligence!

They had been staying at a family's place while it was getting taken care of. 

I have never had anyone question it or care.

I had a situation recently where a young tenant was not working out and not taking care of the property and I called up his mother who co-signed the lease and said I was going to have to do an eviction.  

I"m gonna take care of this today!!

I've not yet done the math to determine which strategy would save me more money, but the big cons of this areNo primary residence, therefore slightly higher interest rates, 20 - 25% down (but depending on the market, this may very well be equivalent to 3.5 - 5% down in LA).Depends on the quality of tenant screening, but it's probably safer to assume that they won't take as great care of the property as I would.Probably need a property manager, professional or tenant.Either strategy seems to net me the same cost around $1,500 monthly, but I'm biased towards Los Angeles as I can rent to friends which solves a lot of the tenant/landlord issues.I'm not looking for anyone to give me all the answers but would appreciate any insight, food for thought, and constructive criticism. 

The bank doesn't know or care because they're receiving the mortgage payments on time and there's no change of title or anything.Here's my plan.......Can I purchase a second residence/vacation condo?