My question is how can someone be so far off on value and continue to keep their job? 

The property needs to be one we are proud to own and preferably would be willing to rent out ourselves. 

closing costs on the buy and the refi for example will be hefty - thousands of dollars on each. 

Just understand that you'll need to manager the PM, so you can't be completely hands free. 

I have a capital gain taxes question:if I sell my home for 510k and provide the seller 10k seller credit towards escrow costs, would I be paying capital gains taxes in California for that additional 10k?

With you being qualified for an FHA loan on your next home that you're purchasing, will you be using the rental income from your departing residence to offset the mortgage payment on that property?

Notes: - Two free weeks of stay per year for the owner/landlord (Gordon) landlord responsible for the repair or replacement of major items that a typical LTR landlord will be responsible for, such as major kitchen appliances, A/C, hot water heater, and of course anything structural.- Hefty penalty on either one of the parties for early termination of lease Owner plans to invest some of his own money to upgrade/refurbish things?

Since you are in an expensive market, commissions will also be high so you should be able to cover all of your expenses with just 1 deal basically, maybe 2. 

When you look at cash flow modeling, borrowing much more than that causes it to be tough to get a positive cash flow.

Quote from @Donyea Jenkins: State and market specific to be honest, some areas have a lot more REOs than others.