Additional information:-Each party is bankable and both have capital for down payments.

The VA loan is powerful - no money down and no PMI - can be split across properties - caps out in the Springs around 495k I'm sure California is higher - there is a funding fee that increases up to your third time using the loan but in my opinion it's still a better deal because your interest rates are typically .15 -.50 lower so you make up the money in the longer run - If you are a disabled vet more than 10% your funding fee gets waved.

No one will ever do it perfectly on the first investment (and maybe second or third), so you'll always have takeaways to do it better next time. 

I second (third?)

Lastly they are willing to do a lease purchase agreement which is the most advantageous to both of the parties I do believe since I now have experience with this technique. 

The basement is open with a full bath (we recently added during a sewer upgrade); the 1st level contains the kitchen, living, dining, and mud rooms; the 2nd level contains two beds and one full bath; the third level contains two full bedrooms (a large, nicely converted attic). 

I say this knowing it is a bit controversial but I say it because the military (for the most part) is very stable.

And invited me to his Christmas party talk about a duck out of water..

You just need to ensure no disqualified parties are involved in the transaction, and that the note is in conformance with state lending laws/disclosures.

That part is super handy.