@Jeff Shaver You can leverage your $550K equity by selling your San Diego property through a 1031 exchange to invest in a higher-cash-flow asset, like a multifamily complex, while deferring capital gains taxes.

However, vacancy means covering 100% of the expenses.Multifamily properties almost always generate higher cash flow due to multiple income streams, which also reduces the risk of vacancies.

The California method is you buy High and you sell HIGHER.  

Perhaps your rents are just higher, but I wouldn’t suggest getting into a negatively cash flowing property especially for your first one.

Then a bank will lend on the two as if they were one and that will result in a higher lending amount.

If the insurance is higher, like in a flood zone, or hurricane zone the net will be lower. 

Perhaps slightly higher from an alternative lender but definitely not from a credit union and expect much higher fees.

Quote from @Anne Gel: @Russell Brazil: I'm coming to the party late, but I don't get it - what do you mean by higher casflow = more risk?

Then, the lease will be up in the summer when the demand is higher to get better returns 

And if you decide to own a dog that is on a list of breeds that are a higher liability, then you take that risk.Dogs that are bred to be aggressive are more likely to be aggressive.