With that in  mind,  I am looking  to build relationships to enable me to become a  successful long distance real estate investor starting with the my first deal.

It would also buy you some time to line up legitimate private financing from other sources if the seller does not want to finance it over a long period.

Make it clear that their failure to perform inspections enabled the problem to worsen and they are therefore liable.If they refuse to pony up, you can file a complaint with their Broker and then the real estate commission or whatever your governing body is for California.

Look for a legitimate cash buyer.

A lot of investors overlook the deals/opportunities that are already easily within grasp of their existing portfolio.Your analysis seems apt to me, obviously the 'your time' is hard to quantify - I'm not sure that the jump from 2 to 3 bedroom would enable getting less needy tenants - at least with what we're doing - I think this would actually typically be the reverse if I had to generalize. 

That will enable you to attract top paying workers and keep your property relevant for the long haul. 

Or maybe, to put this a different way, isn't there any service that enables people to charter your boat for day trips? 

Wholesaling is a perfectly legitimate strategy, but there is so much misinformation out there....so many sketchy techniques taught. 

This system has enabled me and my associate investors to make lots of fast money.

If your attorney's arguement is "I've done nothing wrong but win the auction" then you will need to show the statutory proof that he auction was legitimate and your rights were sealed.