@Logan Allec provided an outstanding explanation, and @Basit Siddiqi added couple good points.I just want to frame the bigger picture: the new law does NOT hurt ("hose", using your word) people who receive 1099-G for prior overpayment. 

Welcome, @Julie BaekYes, SoCal can be a tough nut to crack for newbies.A couple years ago I mailed out lots of letters to homeowners across LA County with no luck.Then I tried rural Kern County and got a deal from a distressed homeowner in California City.The margins were not as large as they would've been in LA or OC, but I was able to rent it out for 2 years before fixing it up and selling it for a decent gain.Also, have you considered an owner-occupied small multifamily for your first deal?

Perhaps fix up a couple units, increase rents, live there for 1 year, then move on to the next multi family.

That, coupled with cash flow concerns you expressed tells me you should be going for a higher number.

I actually used to live in Valley Village (Magnolia and Laurel Canyon).Anyway, SoCal can be a tough nut to crack for newbies.A couple years ago I mailed out lots of letters to homeowners across LA County with no luck.Then I tried rural Kern County and got a deal from a distressed homeowner in California City.The margins were not as large as they would've been in LA or OC, but I was able to rent it out for 2 years before fixing it up and selling it for a decent gain.Also, have you considered an owner-occupied small multifamily for your first deal?

What you described can be done a couple of different ways, paperwork-wise. 

You can do that a couple of times but don't abuse it (your question already shows that you are aware of that).3.

If you are using a property manager and found one already, then your property manager probably has a couple guys he/she works with.

Had my license and flipped a few homes a couple years back, but got a promotion at my job that made me step away from real estate for a few years.

I am trying to get a fair price for a couple turnkey sfr and there is a question about pricing of turnkey property being higher than mls.In the c neighborhoods of dayton, oh, mls prices are generally below 50, owner occupants can't get financing, flip to sell is not really feasible, freshly rehabbed properties rent quickly and for good rents and good tenants.