Should I just chalk it up as a loss and move on?

This post has nothing to do with cost segs.

My GUESS is these homeowners have been tricked/screwed in to signing a long term power purchase agreement, often with no buy out provision.

Can try to reposition to Class B, but neighborhood may impede these efforts.Vacancy Est: Historically 10%, but 15-20% should be used to also cover tenant nonpayment, eviction costs & damages.Tenant Pool: majority will have FICO scores of 560-620 (approaching 22% probability of default), many blemishes, but should have no evictions in last 2 years.

Most investors from California that post stuff like this usually end up in the Midwest.

With running this "business" there will be operational input costs.

I think you need to find a good local agent, network with investors(local meet ups, FB groups, etc) and learn more to dial in the gameplan. 

Lease was signed before.

He scammed a lot of people out of a lot up-front of money.

Don't look for lowest rate, look for lowest cost on fees as you will either refinance out of that loan or sell- the prepay will hit you on the back of the head like a cinderblock wall.