I have already found and vetted tenants so the only cost to him is the lease; I've made arrangements for current repairs. 

That is a great benefit of that arrangement, but you didn't mention that the downside is assymetrically shared by the property owner.

I'll be looking into other arrangements.

This gives you the benefits of ownership without the hassles of “landlording” or playing general contractor—in my opinion, it’s a more feasible arrangement if you’re looking to live in one state and own in another.The initial outlay can be pretty reasonable as well.

Check your buyer rep agreement for how that's arranged. 

What is your arrangement with your service provider

If you want to see it pre rehab, we may be able to arrange something for Dec 1 (it is in Pt Loma near OB).I get a lot of off market property listings sent to me.  

BUT, in finance, in mortgage brokerage arrangements, "investor" means your own money, not your uncle's money, not your buddies money, not borrowed money, your money.

You may even want to arrange it in such a way that it's a JV between you and that investor2.

To safeguard against being pushed out, include provisions for mediation in case of disputes and consider filing a lien or using escrow arrangements to secure your share of profits.