To my understanding, the 203k loan has the benefit of minimizing upfront cost to acquire the property,  but you get punished by the premiums over the long term.

I think it's important to watch for political indications that deregulate lending (talk of such has recently been stirring).  

However, very few markets appreciate 3% annually every year and TK providers typically buy in B / C neighborhoods with minimal appreciation. 

She is a 50 or so years old who would afford a 100% or the rent , she has indicated in her application that her daughter (30ish) and granddaughter (11) will be living with her, they are under the occupant section of the application.This lady has a clean record, good credit score and stable job with the county public school system. 

You indicated that you mailed absentee owners and tax delinquent property owners.

I legitimize the use of electric, because the gas company charges a connection and service charge which I believe is around $250 a year and while electric is more expensive, it is minimized by not having to pay for gas service to the property.  

A good indication that there was a tank at some point.

I haven't seen them yet but pictures looked better than I expected and don't indicate a lot of needed repairs.  

Everything I've read, here and elsewhere, has indicated that the Southern California (especially the OC) market is not ideal for cash flow investing but more so for appreciation.  

You should strongly formation of an entity, figuring out your financing, and finding an office location that is convenient and has minimal distractions there.