I am comfortable putting about 15% percent down for the properties I'm looking at and "can" put down 20% but will need to be stretched pretty thin.

Especially anywhere in California, and particularly Los Angeles county.Talk to longtime neighbors who might know story and whereabouts of owner, but don’t accept as fact.I’d start with researching who the record owner is.

I completely understand almost all of the frame work and bases but just need actual advice from someone one on on.

Renting by the room (long-term) is stable but requires tenant management, while Airbnb (either by room or whole house) can bring higher revenue but needs more hands-on work—make sure to check Little Elm’s short-term rental rules.

Quote from @Evan Malburg: Hey BP Community, I'm new to investing, but not new to real estate.

Some risk of foundation causing other issues but I think it's the best of the terrible options.

The properties are simple but well kept, and I am seeing rents around $650-$850 range for a 1/1 around the area. 

I have seen individuals take a lien in the secondary position to decrease that downpayment, but you would most likely need to use a good lender who would be comfortable with and allow a secondary.   

Just to clarify your water usage hasn't likely gone up 20%, but rather the amount tracked amount they are billing you for. 

First of all- the security deposit isn't "yours," but it isn't the PMs, either.