Every one she told me it a bad idea she wakes up the next morning saying "You know,I was thinking about that house... " I showed her my next mission tonight, 3 different properties. 

I am claiming that these were normal wear and tear and potentially from tenants before- which would not have been detected during move in.

I have read other posts but they all seem to be 1-3+ years old and I know things change, is this something that is normal or should I walk away.

You normally give great advice, but I need to disagree with you on not reporting rental income.

Treat it like normal.

Transfer taxes / stamp taxes are normally added to the cost basis of building / land.

The tenants that you get, offset what you would normally pay, so it's a great set-up with less risk than having 2 mortgages to pay for if you lived in a home and rented out a 2nd home when you start this REI journey.In Gilroy, you will get appreciation, and you should be able to rent out rooms at a good price point. 

If there is an out of the ordinary issue or larger than normal expense then the property manager contacts us for approval, but other than that they know our expectations and manage the property accordingly.

Is this a normal start or am I making a big mess?

Down to earth, normal talk, no "salesy" approach most other communities were doing.