So I think I will also plan on the conservative side as well.I put our first rent check in the savings account after paying the mortgage. 

If the owner could sell the house and pay off the mortgage, they probably would have done so already.

He signed the paperwork (as did you) and legally he's responsible for paying it.

I didn't implement it because I didn't feel comfortable setting up an official government-looking website and letterhead, tell them you will send them money to pay their taxes, then tell them that you can't.  

He says he doesn't have to pay us capital expenses because we didn't actually pay that, the previous owner did.

Also, most of the stuff your list is low cost which is great, but once you start getting the deals and paying yourself back on the direct mail, double and triple those actions too (of course when you to a place financially that you can do that effectively).  

If you must pay, offer to do free work for a rehabber, tax lien buyer, or just dpent time in tax office, I have and it works!

I think I have to pay $$$ if a lawyer generates the forms so I don't want to do that.

I will never buy in lower income areas (Class C)  regardless of state and with the landlord tenant laws in CA, I'm apprehensive if I need to evict a tenant who can't pay rent or causes problems.

We have created a contract that states i have to pay them back within two years via  refi to get it out of their name and into mine.