You can determine if it loan qualifies by looking at the property listing on hudhomestore.com, or by asking your agent. 

The condo board wants the higher of 3% or $6000 as an alteration fee.

You will need to come up with the down payment (lenders want you to have skin in the game). 

So I have been asking friends if they would co-sign on this loan (to purely borrow them for their W-2 income credentials) and in return for helping me qualify, I would pay them $1000/month while I own the property.

Or look into a passive fractional option that still qualifies for 1031 treatment. 

As with most things..... a million ways to skin a cat. 

Also, make sure you even qualify for the STAR program.

Because of the long arm of the California Franchise Tax Board and what they consider doing business in California, my LLC will be deemed to be doing business in California, since I'm managing the LLC from California, even if if the property is located outside of California. 

Depreciation qualifies as a business deduction.You do increase the chance of an audit with an amended return.

Probably losing money as long term investments.To make low value properties work you may need to group a few together to be able qualify for refinancing.