My lease requires professional carpet cleaning, which would cost more than $500 for a home of that size.Yes, it's reasonable to reduce the cost because she was such a long-term tenant.

In California the DRE does not require you to join any association.

The issue I had was that most lenders required a certain number of completed flips done under a LLC.

You said public water was available...would the lots require a septic system to be installed or is public sewer available? 

I would start by finding areas you actually WANT to live and go from there.Picking a place to call home simply because it has a real estate market that you feel will fit your goals is a great way to end up miserable. 

I have been told by a contractor that the foundation of the building is intact, so it does not need to be torn down but requires a "gut renovation down to the studs."

This apartment required a cosmetic renovation that is going to run me around $27,000 to redo.

The city has changed Section 8 requirements multiple times lately.  

You should require the tenant to carry $100,000 liability.

I have a few dozen rental homes, and I've found that the only master umbrella liability policies my agent can find now require $1 million underlying liability coverage on the landlord policies.