There's nothing preventing the former owner from qualifying as the prospective owner-occupant as long as they meet the strict guidelines for being a prospective owner-occupant as set forth in Civil Code 2924m(a)(1). 

Even so, are there are other considerations like family or significant other that prevent you from considering a move like this? 

Besides comprehensive lease agreements outlining the tenant’s property maintenance and damage prevention responsibilities, I am also thinking about signing with a tenant's additional agreement with all prices for typical damages which they need to sign with a lease.

We are in a reverse frog boil environment  - Instead of boiling to death slowly they raised IR so fast that people are unsure/unclear when it's a good time to come back in - they will more than likely lower rates 1/8 to 1/4 point at a time, incredibly slow to allow the market drip back to normal preventing a surgeI'm also seeing people drop $5,600,000 in cash to $13,000,000 in cash like it's nothingCash rules down in florida even on 889K deals 

Having the tenant  makes it:A) harder to show the property, making it harder to sellB) prevents a majority of owner occupant buyers from being able to offer on the home.

I believe it tends to give me a slightly lower return, because the sponsor is going to be more careful, and if there is a severe downturn will prevent me from taking catastrophic losses.

These policies always weed out competition, ultimately backfiring on the very people they are intended to protect.I’ll invest as always in CO, and while I won’t vote for people who push such policies, I’ll keep investing, knowing that more government prevents the market from working and introducing supply long-term, limiting my competition and driving up rents and demand from quality tenants ever faster.

My local power company has a program where they can lower power consumption to a property(ies) to prevent the grid going down during high power usage surges. 

Moving forward blindly on that deal would have put our investors money at risk, which isn't an option, so WE took a $60k haircut to prevent that.

I think the 8 of them keep Max Factor in business.So for preventative measures will help.