@Micah Brigoli I would use your contract and make sure you have had a lawyer look it over to protect yourself.  

You need your Title company to be involved now for your own protection. 

I told him I will be opening a seperate account,so I can protect my personal account and he was ok with that.

After a bunch of reading here on the forums and blogs and countless books, I've decided that I like the idea of incorporating either with an LLC or S-Corp or perhaps another entity for the added level of personal asset protection. 

How can the landlord protect themselves from being taken advantage of?

I figured 125000 to protect us which puts us at 500000.

This can help protect you against frivolous lawsuits that are prevalent is CA.

The Home Inspector is biased towards their client and protecting their interests.  

:)Here's an article by auction.com on Due Diligence with foreclosure properties: http://www.auction.com/blog/due-diligence-10-steps...I've found that people facing an auction often are conditioned to be protective and usually are desperate (how can you blame them) so they'll do what they can to cure the default or reach an agreement with the lender at the 11th hour.

In addition to summary process (eviction) cases, the courts’ jurisdiction includes small claims cases, consumer protection cases, and civil actions involving the health, safety, or welfare of the occupants or owners of residential housing, including cases with personal injury, property damage, breach of contract, and discrimination claims."