Next, figure out how much the entire rehab will cost and contrast it with the possible rental income.

Given that many people have said the average price to build in California is $200 and above per square foot, I became worried.Do you think building a 2-bedroom, 1-bathroom home measuring 550 sqft is feasible at this cost?

Here is a link:https://planning.saccounty.gov/applicants/Pages/Short-Term-R...

Feel free to comment on any of this and DM me if you want to network or have questions.

The seller did not realize there is a cost to lock in rates.

As an out of state investor, I made the decision to pull my equity out as construction costs in the area are incredibly high with limited availability right now.I completely agree that luxury rentals would be my prime target for a 1031.

What does something like that cost?

If it's buy and hold make the landscaping low to zero maintenance to save on costs or having your tenants be responsible. 

I'm just curious...I'm here in CA, and with the cost of housing, I'm always wondering if my home is too large and if I should be finding other ways to invest my money, such as buying rental property (2 town homes instead of a house for example) and moving into a house later. 

Also, if you just have questions/want to discuss feel free to hit me up directly.