I think it's ridiculous to pay a tenant to leave, but it makes sense in places like California.

However, a lot of concerns can be mitigated with looking at their past rental behavior in a lot of different settings.

Then they would pass us and leave without further ado. 

Condos are cheaper than houses, and to my mind, a vacationer wouldn't care much about staying in a bigger place for their short stay, and would be more concerned with a good location and a nice view.Thoughts?

Extremely communicative and Bob spent time over multiple phone calls answering specific questions I had concerning the deal.

They look like they are sitting on wooden piers and not on a slab or perimeter foundation.As far as lenders are concerned, that could impact the financing.

The best banks that I have found based on your main concerns are smaller, regional, community sized banks.

Don't leave this option OFF the table. 

I know the 401 penalties are steep but my thoughts are if I can gain enough cash flow to leave my current career, do I really need to worry about whatever money is in there to draw from 20 years down the road?

When you do that, you can get better pricing and leaves less room for error.The best advice is to push forward as quick as possible, fail forward, and always continue to introspect on what you would do differently and then ACTUALLY go back and implement that change (easier to say than do).