Your current situation with your properties is proof of the benefits of long term buy and hold in real estate. 

We are thinking of moving out of the main house and renting it for $2300.

Or real estate.Educate yourself: the main principles are not that hard to grasp.

To achieve similar tax benefits for midterm rentals, you would need to qualify as a Real Estate Professional by spending over 750 hours per year and more than half of your working time in real estate activities.This post does not create a CPA-client relationship.

Also, working with an investment team costs no more than working with any other realtor, but you get the benefit of years of experience and all the resources you're going to need.In summary, do not limit yourself to California.

Goal is to make real estate main source of income and sights are on best cash returns while building a portfolio.  

Hey Salvatore, when doing BRRRRs in C and D areas the main benefit isn't going to be the appreciation factor but the fact that there is a lot more supply of deals that will give you an all in cost under 80% of the ARV and that the deals will be able to cash-flow after the refinance. 

However since we are approaching holidays(slow market) and my separate plan to acquire a different Airbnb property failed so I am thinking about pivoting to make this house an active STR primarily to take tax benefits. 

Learning more about the depreciation + tax benefits is now on my list.

Also, if your short-term rentals qualify under material participation rules, you can still use depreciation benefits to offset W-2 income regardless of whether the property is in an LLC or not.When you own in both states, you don’t necessarily need a separate LLC for each property.