I am currently a renter in Northern California with no plans to buy in the market where I live.

Correct, the same prohibited transactions rules would apply to using a unit as an office as they would to living in the unit.

I live 3-4 hours away, so I'm putting together some local resources.

(even if it's a previous LLC)I am eyeing a property in my hometown. 20-units, all 2bed/2bath, new roof, water heaters and exterior paint.

I live in the Chicago suburbs, so just about every type of neighborhood is available... cheap, expensive, old, recent construction, well kept, run down, etc.  

How are you able to tell what is the average salary of the people who are living in a neighborhood?

As I am living in the property I am updating things such as the bathroom, paint, cabinets, countertops, and doors.

What a find interesting and have a hard time understanding is that I have seen several houses that are not on the water or might be a smaller home (2 bedroom) listed on airdna and awning that are getting a higher(in the $300's) ADR than the 3 bedrooms on the water. 

@Stephen Rinaldi just curious, how long is the owner required to live in the property under these terms?

Note: you can Never hire a parent, sibling, child,grand child or yourself to work on the property and none of these people can live in the property.    5.