I hope you or someone is at least keeping an eye on your properties for break ins, squatters, roof leaks, temperature control, frozen pipes (if in cold climate), if you have a basement and sump pump goes out leading to water damage etc.I just talked to two investors in California that have let their properties sit vacant (no mortgages so paying property taxes and insurance).

I would like to be in control of my money, so I have always gone with the highest deductible posable and maximized cashflow.  

@Justin Goodrich I can speak for a lot of investors and say our biggest problems are out of our control. 

In other words, all the other MTR hosts are dealing with the same expense.To control this expense, I always recommend an utility cap where tenants are charged for any usage over an established dollar amount.  

Most owners who do it want to keep the option of having the building vacant when they eventually sell the place since vacant places sell much more easily then tenant-occupied ones if it's a rent controlled building.

They also are thinking of getting a different PM to manage it after they can gain back control but would like advice on doing so.

The biggest difference to me is that YOU have control of every aspect of an active investment, while somebody else is in “control” of a passive investment.  

They can be used in situations of control or hope.

The lessons you learned the hard way in 2008 will be invaluable now, and it’s great that you’re aiming to stay small-scale and within your comfort zone of Sacramento, which gives you an advantage of knowledge in that market.Given your experience, I'd say start by focusing on three key areas to build confidence and minimize risks:Budget Control: Over-renovating was one of the big mistakes you mentioned.

The answer is that if the lender that's doing the hard money loan is only funding the purchase and not the rehab, they then have less oversight of the project since they're not doing the draws, and thus not seeing the progress of the project and having control of the funds or draws from the rehab to make sure the project is progressing.