I do not reside in these markets.

My understanding of the strategy is that you would find a good investment property, increase its value and stabilize it, and then refinance.Pulling out cash from your primary residence tax-free can be great, as long as you are getting a better return than the additional interest you are paying.

But if you do, you'll have 2 addresses....one for the resident agent (google it) and one for your mailing address.

Then sell at 5 years to meet the primary residence requirements. 

Scenario:I sell my house on owner financing for 200k with a 40K deposit. Would the new buyer be getting a loan for 200k or 160k?Help with this would be great.

I will be acquiring the property as a primary residence so hopefully I can find someone with a reasonable LTV and lower down payment.

I am new to Real Estate Investing and currently own one single family rental in Colorado Springs which was previously my primary residence while stationed in Colorado.

In addition, it would be helpful to talk to the exiting residents and see how much appetite there is for them to own and to get a sense for their financial strength.Hope this helps.

Someone told me Poway is paying residence to put them on their property which is crazy.      

I am in almost the same set up as you, a flat 2/1's, and a carriage house that I reside in.