This is mixed use as well as storage would be mixed use.. so check your zoning.. and insurance.. 

Both replies support the direction I am leaning, but it just helps to have others' opinion of my background and therefore how I am going to proceed. 

Find out what the college is doing before proceeding with purchasing it.

There's emotion invested into this property already.Now I'm sure that should you proceed to get these two properties and were to raise the capital needed, everything would run just fine.

In general states with income tax (CA) should avoid doing RE investing in states with high property tax even though I know of some San Diego RE investors that appear to have done very good investing in Texas (@Cody L.).Your cash flow on the Texas properties do not appear to have cap expense or vacancy factored in (and possibly not insurance or maintenance). 

There are still some things I am sort of "guessing", like the expenses (insurance, sewer, etc), but it's helping me learn where my gaps are in the analysis so that I know what I need to focus on.  

I was also told by another investor if I am to proceed, to put a contingency 'subject to inspection'. 

Have there been any insurance claims on the property?

The flat fee should be his insurance against you "wasting" his time, and if anything it should be refunded at closing, not charged.

The monthly cost breakdown is as follows:Mortgage - $1,200Taxes - $700Flood insurance - $170Home Insurance - $150Reserves - $500I went into this saying I wanted to pay no more than I currently am paying in rent ($900) to live in this place.