At most you just need to submit building permits to build/modify whatever is needed for a commercial tenant to use the site. 

In this sense the risk is walled off and contained just to the LLC in which you invested. 

We did owner to owner.

CMBS issuance quadrupled to $6.7 billion in 2024 — reaching its highest level since 2019 and representing 27% of nationwide multifamily issuance.However, this surge comes alongside rising distress levels, particularly in pre-1974 buildings where distress rates hit 25.1%, compared to just 2.9% for properties built after 2000.

Overall, i do not consider it a bad place to live if you can get used to the not so good.

Are you planning to do long-term buy and hold?

This might allow you to keep the good performer rather than having to sell it.

Older properties have the awful plaster which is very hard to repair without gutting and replacing.

Quote from @David Brooks: I've received advise that our friendly STR loophole can not be used to characterize STR income/loss as non-passive on a California tax return. 

It's great to see your enthusiasm for diving into real estate investing, especially with the BRRRR method.