That is natural vegetation and looks nice as long as its not poison ivy.  

If you're going to buy out here you have to play the long game, you don't lose until you sell, that's why real estate is so great, even if the market tanks you still have a hard asset to collect money from (because rents do not go down) and you have tenants to pay your mortgage while building equity and historically San Diego has been a great appreciation market, so of course one shouldn't speculate, but let's be honest, Real Estate is inherently an appreciating asset by it's very nature. 

@Angela Henderson, they just call it "commercial" since the loan is made to a legal person (the LLC) and not a natural person (you). 

You gotta ask yourself, am I buying this to make some money and have a "jewel" property that I can feel good about having in my portfolio, or am I buying this because I believe I can extract the maximum value and dollar amount out of this 1.3 or 2.6 million?

This implies that you will not be able to extract the full $150K equity through a typical refinance. 

The investor/buyer naturally will want a better deal than usual.  

Also is there a method of extracting the equity from both properties in a single transaction?

Sure, these are natural byproducts of doing what we all do, but I am really, truly into REI for the experiences of life. 

Never, but the banks I deal with love to use 75% vacancy for LTR (stupid, Bozeman has 100% occupancy for LTR, never in my 15 years PM'ing here have I had an empty apartment), and 50% for STR (due to the nature of my market).

i'd go with natural gas if money is not a factor.