What's even more frustrating than asking the IRS help desk, is asking a Turbo Tax "Tax Specialist".

The property tax is higher than other markets, but generally, the numbers still work. 

Use tax benefits like depreciation, repair deductions, and tax-free refinance proceeds to offset income, and consider an LLC for liability protection.

If you need financial help, ask under the "Finance, Tax, and Legal" forum.

You mentioned gross rents of $3400 per month and Principle/Interest/Tax/Insurance of $2500 per month. 

I understand that I need to account for taxes, insurance, and other costs—Should I go with a LML and then do a refi later on?  

Furthermore, California has a very anti-landlord and anti-real estate investor government that can cause you all sorts of other problems as well. 

House needs some Interior Cosmetic Work, Wood Fence Repairs and some Plumbing Work.I want to turn and run, but I recently heard where there is a Problem, there is Opportunity.I thought this might be an interesting Case Study.Thanks for the Ideas.If they owe $180k on a $210k property and its a year+ behind then they probably owe taxes and other bills as well.

A lot going on with the City government.

The data they pull from the tax records on how much a home last sold for, often not updated, or completely wrong.