With a few exceptions that I do not believe will be applicable here. 

In the current market it's difficult to purchase anything (except absolute garbage) in that price range now.

I did the numbers right on the rental (at least its performing exceptionally well so far).

Have an annual or quarterly meetings in NV to do all of that - no exceptions - or your California Franchise Tax Board will come a-knocking,  As to setting up the entities, please realize that your business needs a very strong foundation and several professionals are uniquely qualified and expert in its parts

Everything in the relationship regarding landlord tenant is the same as a market tenant, except section 8 pays some or all of the rent.

So you can rent it out for a total of three years and still qualify for the 2 out of the last 5 residency and get your gain tax free with the exception of depreciation recapture.  

Your plan sounds ok except I would not want the tenants living there to know I am the owner of the home.

I think that once you decide where you want to invest...focus your next efforts on building an exceptional team. 

Except that now it's the 21st century, so it doesn't take 20 years, 4 or 5 years will now do the trick.Local to my market, the way this has played out...Anything 2-4 unit on the MLS, the sellers get 25 offers.

There are markets that would probably be more immune to recession, such as markets near military bases, universities, hospitals, other vital industries and large concentration of government employees.