Sounds to me like wading through some very murky legal waters here. . .

I'd test the waters a little bit before getting too official.  

However, if you move out, you're actually under water $200/mo, and that doesn't even take into consideration your reserves.So, you just need to make sure the property will cash flow without you in it.  

I made a mistake: only called PG&E, not city for water.

thank you guys I am really pumped about starting this new venture.

Are you going to be covering the cost of water/sewer/garbage?  

The utilities are placed in the tenants name (except for water) and I believe the government will assist them in paying that too.

theres city power but i think theres no city water so we'd have to drill a well and put in septic, too

How old is the roof and the water heaters ? 

Its not our primary area, however I do have a house on the water down there so I am there frequently and if I find the right deals I wouldn't be apposed to picking up something there as well.