I only came to learn about it accidentally.

Within the LA market you will be hard pressed to find a single family unit to park the $1,000,000 in an area worth investing for an all cash deal.

More pressing, is my worry that I don't have a stringent enough vetting process in place and sometimes I let my good nature get in the way of making educated decisions.

If they press the issue make sure to request proof before any actions are taken and then resort to your lease.  

From a pure purchase and hold rental property point of view, you'll be hard pressed to make the numbers work with a town home.

I would get a membership with a rental housing association and send that employee to classes (and do classes yourself) so that they don't create a problem accidentally for you. 

Otherwise it's going to hurt once the IRS knocks on their door.Our firm presses boundaries and plays in the grey area.

While the foundation might be an issue, its not a pressing issue (my assumption).

Write the story out, including names, dates and times of contacts and send it to everybody in city government you can think of.Then send it to the press and ask them if they have a Troubleshooter type person on their staff who advocates for citizens being mistreated by businesses or government and see if they'll do a story on it. 

You would be really hard pressed to find a good deal in either of these areas that isn't going to require significant work.There are some okay parts of the Clark/Fulton area, but I'm not sure I would consider it to be emerging and I wouldn't feel comfortable recommending someone to invest there for the most part.