I'm a broker, not an attorney, so seek professional legal advice.

Preferred is 2 seperate leases, just not entirely sure if this is legal. 

I guess make sure it’s legal in your state).- or you could blame the offer on say your financial position like you’re only approved for that amount or something.I’ve personally called craigslist rental listings to try to buy the property.

The best way to go in this competitive market and economy it may pay off to learn about raising legal money for investors and how to form Partnerships where you can maintain control and purchase apartment complexes and be able to give your investors a good return.Good luck to you!

Don't get me wrong, I've closed a few of these (in these cases the appraisal report came back only a bit different from what the agent/buyer described), and had a bunch die after the appraisal came back (when the report is VASTLY different from what the agents/buyer said to me, which is the norm), but due to systemic unreliability of information my position is that the price of a definitive yes/no is an FHA appraisal fee.Make sure you're working with a lender that isn't artificially restrictive, get it under contract, and get an appraisal going.

Do you know how to do it legally and ethically? 

I am wondering if it is legal to sign away your rights to a personal injury claim like this.

Can I legally do so (California)?

Legally speaking, do I keep the money and tell Title to fix the problem on their own?

I've just been renting it out to long term tenants, but I'm wondering if I can legally do short term rentals (AirBnb) even if it isn't owner-occupied since it's zoned for commercial use?