How can I correct cashflow issues if I have 3 properties?

Your specific variable expense assumptions are wrong, BUT you stumbled into them being correct overall.Also, you are approaching this correctly - entering in the numbers to generate a purchase price that meets your metrics:)

Wanted to still be close to family but maintain a cheaper lifestyle, still have strong appreciation, and much better tenant/landlord laws, taxes, etc. 

Quote from @Sean O'Keefe: Correct, California is uniqueThis is a rather diplomatic statement, Sean  ;) 

If it's in the restricted zone (within 31 miles of the coast or 62 miles from an international border, you have the choice between using a bank trust and paying the fees mentioned above or using a Mexican corporation and bearing the costs of establishing and maintaining  the corporation.

Small is easy to maintain as long as renovations were done correctly.

Then rent the bigger home out using a property manager, allowing her to possibly cash flow and maintain that asset and let it continue to grow in value.Encourage her to consult with a CPA or tax attorney to explore the best strategy tailored to her situation.

Offering to compensate them for their time can go a long way in maintaining a good working relationship.Let me know how I can assist further—best of luck with your project!

Just make sure your personal use doesn’t exceed 14 days, or 10% of the rental days, to maintain its rental status for tax purposes. 

They don't communicate well, don't take responsibility for their actions, do not clean or maintain homes well, and will shaft you when it's time to leave.Other than that, it's a pretty good system.