It is so difficult to police and enforce guests, I would focus on the increased water bill. 

It is difficult doing this from a distance. 

ThanksXiang - Estimating the ARV before purchase can be difficult.

The tenant is paying their portion of the rent (the majority is coming from city) but the tenant has been difficult to deal with and I'd like to find an new tenant once their lease is up.

It's very very difficult for a PM to manage a listing and do what they need to do without owning the listing.

I know that everyone makes them out to be these great and easy properties to manage but they are extremely difficult.

We are both physicians and relatively intelligent humanoids, but without knowing what you don't know, it seems a difficult task. 

CA is a very difficult state to be a landlord in and there is a high likelihood that the PM was doing there best to save you from the headache of CA laws. 

Overall, it's a great idea/theory, but execution has gotten much more difficult between regulation and market saturation in some more popular areas.

The difficult part isn't finding that property; the difficult part is finding quality roommate tenants and having good systems for screening, setting up rules and maintaining your future investment to achieve the best results.