Technically if you decline based on information provided by a Consumer Reporting Agency (IE credit report, background check, etc) you have to give them an Adverse Action notice (SmartMove can provide this for you if you use them) which will state where the applicant can investigate further and dispute the information.I tell applicants simply: "We have received your application and unfortunately it does not meet the qualifications for this property."

A private investigator can do wonders.

I check all new properties to the market on Redfin, and if I find one that warrants further investigation, I then look it up on the MLS.

I was renting,when the house fire happened,Fire Dept investigators red tagged it,owners remodeled,from insurance money then sold over a million,never told buyer it was arson,until arsonist returned trying to get it,who is my son awaiting prison,I finally have a place ,home owner told me I can't use him as reference because he didn't want to lie,yet lied to buyer who is now terrified and didn't know ,is worried about safety for her family,,owner never disclosed?

I would investigate the potential longevity of the town along with the rest of the due diligence.

Either way, this still works well as a 2 family given the area, so I think we're going to move forward and still investigate 3 family, but assume we will stay at 2.Once we get in, I'm going to try to get creative with the current tenant to see if we can offer them $ to move out ahead of the end of their lease so we can live in the smaller unit, and rent out the large one in the fall.Thanks again!

If they say no then you can investigate other financing options or just cross it off your list.The 2nd one you say $700 cash flow once you move out, but is that $700 after mortgage + taxes + vacancy + repairs, etc?

That said, I don't recommend banking on that and even with a taxable event upon sale, I'd think your equity can produce a lot more income in another geography.It's unclear from your post if you have the ability to 1031 or not.I'm also not familiar with the Berkeley market but I'd be inclined to investigate opportunities there first. 

Do not ever let him back into any property and own and don't worry about a inspector, you don't have to let him in either if on some blue moon he ever did show up.Inspectors do not investigate "plumbing violations".

Great to see other Aussies investigating the US market!