I’m not sure if they will cash flow, but definitely can find homes in that price range

Personally, I'd never buy the biggest house, or the most expensive house on the street.

I  would look at your town regulations and see also if they have any unrelated persons ordinances and what they say about boarding houses. 

Cap rates generally range from 7% to 9.5% in this current market.

We took this approach because even though the house is an STR it is also one we want to use as a family a couple times per year, and we feel we have our own personality as hosts, so we were particular about what we wanted. 

Agreed, not a large amount of money.

I have found a number of infill lots for developers for large infill projects in San Francisco. 

One of the main drivers of this dilemma is the low 1bd/1ba garage conversion and $30k seems like a large cost for one element of a 350 sq ft conversion. 

I gave them a lease in person to review and sign (I gave them the lease first as they mostly speak Spanish and the lease is in English, so I wanted to give them the time to read it).

But it's tough work and doesn't always pay off.I personally think the big profit is in new development or a project.So, I'm wondering: Is starting something new a better bet?