@Brandon Ross A good property manager will be one of the most critical members to your team.

Main reason without getting to deep is the fact the system is old and I did not have a “first class upgrade”, which is critical for older HVAC systems in CA because the law is any new system must meet a minimum SEER rating.

I want constructive criticism on my thought process.

If you syndicate and are making distributions to investors, budgeting will be critical, as your distributions will need to be accounted for up front. 

Focus your efforts on getting the unit turned around, winning the war on fleas (yes, vacuuming is critical), and getting new paying tenants in there ASAP.

Sorry @Michael Egan, I tried to give you, and all others watching this post, a leg up by giving you exact direction for Step 1, the most critical step, in building a pipeline of off-market deals and some Moderator banned and removed my post saying I was "advertising my company" even though I don't own it, it's been mentioned about a bajillion times by thousands of others, but ok, apparently I can't mention them.

As with any business, it's critical to know your customer, and to understand whether your product matches your customer's desires, needs, etc.If you plan to sell the property, then yes--1 bathroom will certainly be worth less than 2+ bathrooms.One middle-ground strategy is to buy a 1 bathroom house that has a floorplan and plumbing arrangement where it would be relatively easy and relatively inexpensive to add a 2nd bathroom, and then add that bathroom....I've done this before, and in my case it was very successful--it completely changed the tenant demand, produced a great CoC return from increased rent, and increased the value of the property. 

DetailsPrice: $285,000 ARV: $600,000 (based off projected income)        $115,000 rehab budget ($30,000 Roof critical and already quoted, $45,000 updating and repairing residential units, $40,000 HVAC system for commercial unit)               All in budget of:$457,750 = ($135,000+$15,000) + ($225,000+15,750) + ($40,000+$2000) + ($25,000)            Hard Money+11%   +  Seller Finance+7%  +  Private Money+5% + Closing & CarryingIncome:        4 - 1bed/1bath residential units ($2800-3400/month dependent on finishes)        1 commercial unit ($2000-4000/month) brick walls, hardwood floors, 18’ Ceilings, 4000 sq.

You may have critical facts on your side that the HOA hasn't considered.Outside of that, however, whatever you agreed to when you bought the house in the HOA covenants is what has to be done.

I have a lot of respect for agents and brokers and they possess a lot ok knowledge and expertise that is critical to ensure that transactions are processed properly.