You definitely want to use a thorough screening method like rentprep.com that gets their income, credit, background check, and call at least 3 references (make sure to verify them by address/job and then their name).  

Depending on how the water is getting in, there may be cheaper methods for sealing the basement walls from inside.Keep shopping until you find someone trustworthy with solutions.I would also consider going after the first contractor because they robbed you.

Some have used this method to obtain 100% financing.

This is the simplest method, but it also means your tenants are more likely to abuse the utilities by leaving windows open with the heat or A/C running, leaving lights on, ignoring the toilet that constantly flushes on its own, etc.3.

Several reasons but primary is case law there, and the way things are set for LLC's, it's a very conducive environment. - Use the "asset island" method from start.

I'm a local real estate broker, investor, and manager (100+ rentals, mostly Airbnb/STR and multifamily).House hacking is a tried-and-true method and in Sacramento you can produce some meaningful income while enjoying the appreciation and tax benefits of owning real estate.

I want this to be acceptable long term if I keep this method of financing. 

If you are open to non-traditional methods of financing, you could use a debt service loan to bypass that requirement.

House hacking is the best tried-and-true method for new investors in my opinion.

We've also advised this method to our investor clients that borrow from us.