When I purchased it, my plan was to fix up the nasty downstairs unit to a level that I could live in it, and then slowly get better and better tenants upstairs.Then...

I've sold multifamily to a lot of owner occupied clients and everyone goes about a different way based on their comfort level.   

Hundreds of thousands given out on the state level.

At this level of “interaction” it’s out of your hands.Don’t renew lease

Expecting about 20,000 sqft of construction (units and common areas).Related info:Type:Garden-style2-levels with mix of 2 Bed/2Bath and 1 Bed/1Bath unitsMid-grade constructionSite info:Flat land, no major grading work is neededUtilities are yet to be connected (the site is in a developed neighborhood with good road access and utilities at curb side)Expansive soil (known for this region)Thanks!

@Michael RayYou are getting a lot of advice to sell from people who likely don't have investments in the Bay Area or other high cost investment areas.First off - if you sell the property - you will likely lose 6%-8% right off the bat through seller commissions and other seller related costs.You would have to buy another property at 6-8% below market just to make up for it right away.Second, you have to determine what the property is appreciating at on an annual basis, while you are not cash-flowing, the value of your asset may be appreciating at a higher level than other asset classes.As much as people are saying they are leaving the bay area, there is little area's around the world with great weather and atmosphere(minus the homelessness issue) as the Bay Area.Cash flow is good as it brings in income but asset appreciation is where true wealth is created.

The only difference is whether or not you'd be able to offset against your ordinary income...and that's also assuming your income level is under a certain amount (my apologies if I'm pointing out something you already know).As for syndications, as long as we are talking about equity purchases of commercial property and not debt or some of the other fancy syndications out there like secondary market litigation or insurance, you will have very large passive losses starting from your first year.

RE Sale prices have started to level out a bit.

This is a pier and beam house that's going to need leveling, drywall work and the bathroom needs some help too.

The only part I am not sure about if the market will "correct"; I believe it is much more likely that it will level off.The reason I believe that is affordability - the NAR publishes an affordability index; basically how much of a median household incoem is needed to buy a median home with 10% down.