Bill Gulley, the only relevance of my former ownership is the possibility that the transaction should of just been a transfer (there has been no formal dissolution).

Is it just less formal like a lease with option to purchase where as a land contract is something more offcial and recorded with the county and requires a foreclosure to redeem in the worst case?

Seeing as you're in California, which is a non-judicial state, it would be a lot easier to foreclose, than if you were in a judicial state.

Rehabbing and renting is much harder than following corporate formalities (for an LLC).

There is no formal review process for rehabilitations of non-historic buildings.

I have three young tenant applicants (room-mates) who each have only one previous formal tenancy.  

@Shafi NossThere are differences and similarities and of course it all boils down to the loan documentsFor both it of course varies by state on judicial and non judicial foreclosure laws.

After three years I did a formal inspection and found all this oil. 

But I was focused on buying properties not on the formalities.

Wow.You need to look at the whole picture: location, crime, schools, taxes, job market, Landlord-Tenant laws and the judicial system, vacancy rates, natural disasters, and a few other things.