One unit has bedrm and bath closed off due to water damage, it's currently rented as a 1BR but could be repaired and rented out as 2BR probably for an additional $200-300/mo.This seems like a steal, assuming everything checks out with house inspection etc, but what makes me most nervous is I'm not planning to do this full time, I have a job and I can't be driving up there every week to coordinate the repairs and check on them.

Look for water stains on the ceilings, or obvious drywall repairs, potentially indicating a leak.  

. - Water damage is a big one.

NOT true was true prior to 08 in a limited fashion but we learned the hard way that asset lending only is far to risky.2. you need some money... granted I do no money down deals but those ware with my trusted clients of a decade or more with lots of water under our bridge or as forementioned I pick one or two beginners and I groom them.. and I pick them for specific reasons.3. credit and income  Most HML want to see this.. if you don't have massive experience.4. anyone advertising rates under what @Jason Hirko mention is probably out to get due diligence money from you and won't fund.5.

Can the cost to install a submeter for utilities be tax deductible? I would have assumed yes but I know many landlords who havent done it so maybe not? 

http://www.zonerichmond.com/welcome.htmlImagine what will happen to home prices when folks in SF realize they can have a 15 min ride from Richmond to downtown SF and live in a beautiful condo on the water for 1/3 of the price of SF.  

There's property tax, insurance, trash, water, sewer, property maintenance, state transfer tax on both the buy and sell.

With as hot as the market has been recently, many folks who bought in 08 are realizing that they are no longer under water.

Is it illegal to have one water meter in a duplex property when renting both sides out?

Combine that with the rusted out gutters leaking water on there and the California sunshine and I bet you dollars for doughnuts that the siding will be pretty rotted in places.