REO properties have there liens wiped out by the bank before they are put on the market, that is one of the advantages of buying REO properties. i just purchased one for the first time, but i did have my attorney in that state do a title check before buying it to make sure, there were a lot on this property but were all wiped clean before it was listed, in this case i just paid that fee at closing, otherwise i would have paid for if i did not buy, but felt it was worth looking into before buying the house.

They are affordable, but the HOA fees and the politics involved make me leary.

I am assuming insurance, taxes and some local fees would be applicable as part of the expenses. 

Both provide good service as custodians and have flat fee-per-service models, rather than a percentage of account value, which makes much more sense for what you are doing.

To be clear, the pay off is the principle balance plus any accrued interest and fees, etc. if the loan is behind. 

There is also repair expenses, closing costs, business license (possibly), LLC fees maybe, Insurance to protect you from claims made by tenants, vacancy and there are other expenses I'm sure I'm forgetting.  

Additionally, there is an annual $800 filing fee for each CA LLC (each year), not to mention the additional administrative requirements that must be adhered to to ensure full liability protection, and then finally the hassle of the LLC filings themselves.That seems to be a fairly significant burden to incur on a property by property basis since these are only single family rental properties that generate only about 35k in rents a year.

With rental property, the delays and fees associated with each expense payment can be a barrier.A self-directed IRA LLC will provide you with checkbook control.  

Sounds like you need to partner, or give the lead to an experienced investor for a bird dog fee...

I didn't know that closing fees and points are usually charged up front.