I would investigate to see if the renters are using excess water, most commonly caused by a running toilet. 

Insurance may take some time to investigate and pay out.

This is a great place to learn and further investigate investing in real estate.

I will investigate further with a CPA to see if the possible tax benefits outweigh the cost of setting up the LLC, yearly state franchise tax in California and cost of yearly tax returns. 

If the average is ten days, further investigation is required.There are other considerations.Competition - Your property must be perceived by at least one qualified tenant as the best option for them.

Quote from @Simon Liang: If I had multiple markets to choose from, I would start investigating property managers and invest in the market that had the best management opportunity.

Do I need to find the tenant using a Private Investigator or some other means2. 

I'll investigate a bit more regarding potential cap ex items.

All the funding options you mentioned are good to investigate.

So the due diligence period (aka "option period", aka "feasibility period", aka "investigation period") is usually a lot longer than a typical option period to buy a regular SFR.