The down payment/overall price, insurance, taxes, etc seem much lower and the ROI looks to be the same, if not higher on the SFH.

That is negative $100 cash flow.To continue to hold, I could refinance to lower mortgage to about $1000, increase rent to $1600, cancel pool service and cash flow about $360.Or terminate lease for a struggling single mom and take the cash to turn into a larger investment. 

Sometimes rehabs are priced high as an estimate and then a contractor would bring it down to a lower number that wouldn’t scare you.

The best way to get cash flowing properties in these areas are finding a place that needs serious work, investing that rehab to increase the value, re appraising after the rehab and then pulling out as much cash as you can on the refinance (thus lowering the cash youve put in out of pocket and hopefully giving a good return on your cash)Hope this helps!

Unless you market is hot, you run the risk of attracting lower quality tenants.

My dad always stressed the importance of living below your means and that living mortgage free can free up money to allow you to do what you want in life.My wife and I got married after graduating from college and moved into a small home we had purchased.

Worrying about things beyond our control will just lead to additional stress and serves no purpose.P.S.

Also, my understanding as per my attorney, even if you buying at an HOA foreclosure auction where they set the minimum bid lower than the judgment, the buyer is still responsible for the difference....HOA debts stay with property regardless. 

Well obviously my market is much different than you, mine being much lower priced than Cali..if we were to build for you here it would be $375-400k for the building.

The housing affordability crisis means that lower paying jobs are having a hard time keeping employees.