I fear the days of purchasing any property in the Ca coastal cities and doing great is past.  

Yes, you'll be paying mostly interest rather than principal paydown starting out with the FHA loan hence the better play for you on paper but maybe not on the monthly.It's not too risky so long as you pick your market(s) and do your numbers right.

My client put in a sand volleyball court, as it's quieter than most similar sports. 

Takes $1,000's and $1,000's spent on marketing and infrastructure every month to find seller's that distressed and be able to pull everything off on time and on budget to do something like that.

On top of that, a lot of these homes are from the 1960's,70's, and 80's that are practically going for the same price as brand new homes because I'm looking in 3.5 or 4 (out of 5) star neighborhoods in states like Texas, Florida, Georgia, Nevada, Arizona, South Carolina, Tennessee, Oklahoma, and Kansas.

you can track it back to the CRA and everyone should own a home mentality of our politicos . then add Wall st poring sub prime loans  into A grade bonds and you had a disaster no doubt..its really a miracle in a way we got out of this.. and maybe we just put a bandaid on it.Canada though with so many natural resources is always going to be fine.. just log some more timber.. extract some more minerals or keep plowing through the Oil Sands.. 

You purchased shortly before the Great Recession (GR), they bought shortly after the GR.The duplex I purchased in 2012 for $302k is worth over $1m.note that duplex would produce higher rent than your $900k Carlsbad RE   Also Chula Vista is gentrifying more than virtually all other San Diego communities   This is because 1) the large bay front redevelopment 2) west Chula Vista is some of the cheapest bay/ocean property for many hundred miles  3) Chula Vista is unusual in coastal is less expensive than inland,  this results in coastal Chula Vista possibly being an opportunity.It is my belief the price is slightly high.  

To people that are used to living in houses built in the 70's and later, not having a bathroom on the top floor may be a deal breaker, but if this is a popular part of town, particularly if it tends to feature older houses (1920-50's), then the people looking in that area will likely not mind as much.Now, if every property around you has multiple bathrooms on each floor, and yours is the outlier, then that could be an issue, and you will need to price rents accordingly, but overall, you can't please everyone, including your friends.

Here's why:#1 Everyone is caught up with rent (I do not accept sec 8)#2 Everyone takes care of their units#3 No one is disturbing the neighbors or the neighborhoodThese are my lines in the sand.

Thanks again to @Bill Gulley @Darren Sager @Jeff S. and @Jerry W. for your advice.