If you refinance it you will be playing closing costs again and will be even more under water.  

This attracts a lot of out of state investors who think that the low barrier to entry and high tenant pool equates to high cash flow at double digit rates as it would appear on paper. 

If you wanted to fight one mortgage for both units, look at the electric meter and water meter for the building.

The owner also installed a Rinnai hot water heater that he supplies propane for each apartment.

He is still fighting the taxing authority in court over this.A large community was sold to a less experienced buyer who in cutting corners failed to determine that the water supply was contaminated by Radon.

I am estimating about $40K in rehab costs including cost to fill in a pool in the backyard and convert to grass.

- Don't know rates in CA but $225 for a 18 cu ft top mount fridge, no cold water or ice maker, less ~5 years old with a 60 day warranty in Cleveland is not badAre you going to be keeping the fridge and they are contributing to upgrade what they get or are they keeping the fridge if they move out and you are contributing from the goodness of your heart?

. $300 cash flow post 5% vacancy, 10% capex included, PMI deduction, water, tax, and insurance. 

They are going to call and say there is a bedbug infestation, rats everywhere, no hot water, holes in the floor, the door won't lock, leaking roof, and the tub is cracked, oh, and the landlord refuses to fix all this.

I mean, how could I not when all we end up doing is playing video games or shooting pool?