Our goal is to own a few free and clear...the cash flow will be amazing -  Aloha,JeffJeff, do you really want to lose 2016 dollars just to get it back in 2044 dollars as what you are incorrectly calling increased cash flow? 

Or have I been told incorrectly?

I am assuming you are trying to get an FHA loan for you to personally live in correct? 

Be an employee of the owner working on a salary with NO bonuses or commissions.You don't mention what this girl's legal setup is, but you don't want to get in bed with someone just because the tenants love her - the nightmare will end up blowing up in YOUR face, not hers if she does something even mildly incorrect (read ILLEGAL!).

There may be quirks under state law, but this does not sound like a problem to me.  

I know some of the taxes,utilities and some other miscellaneous expenses are incorrect.

There are certainly some quirks to the real estate market in the Bay Area, so feel free to ask us locals if you ever have any questions.

However; in relation to the title to your post, it's completely incorrect, as the guy obviously wasn't a contractor, so a better title would have been Cons ....  

Someone please let me know if I am incorrect on this.

Otherwise barring other quirks in the contract you should get your earnest money deposit back.A well written contract should have a defaults and remedies clause.