In your shoes, it might be simpler to stay focused on grad school and use your cash to lend to other investors or take an LP role. 

Put yourself in the renters/guests shoes - where would they be looking?

I am sure there are deals to be found in Contra Costa and Alameda however the entry price is daunting in my head and I feel more comfortable getting started with something closer to the 200k and under.

However, if this is during an economic downturn when default would likely happen, there might be no equity in the house for the original seller, and I can't see how a seller would be comfortable being ultimately responsible for a mortgage that might last 20-30 years.

I have more than 20 whole homes under management so I am pretty comfortable on how much they make and who I am targeting as a client. 

Do you wash the bedspreads, comforters, etc... or is there a better way?

I supposed if the structure is valid, it comes down to being comfortable with the borrowers, the projects, and assets that are being used as collateral. 

My father is a real estate broker out east and is eager to partner with me on this journey as well.I guess my question to you would be, what is the logical way to continue or what would you do if you were in these shoes?

I'm telling people what I wish they'd tell me if I was in their shoes.2.

Based on this, I felt comfortable doing a screen share with with an investor client and one of the agents on the FIG team.