In my opinion Option 1 could be a bit risky in today's environment as we are not sure if prices have hit the bottom yet, there are positive signs in the CoS market that point to price appreciation in the future, but there is a good chance the interest rates are not coming down for a while, which will have a negative impact on home values. 

.- I've been on the sidelines with this weird high interest rate and volatile environment for about two years now.

Peace & BlessingsRay

You can serve a "notice to cure" which gives the tenant a specific timeframe (usually 14 days) to fix the violation (in this case, not properly maintaining cleanliness or disrupting the peace).

In my area the sheriff is there to remove the person and keep the peace .

People have to really put in the extra work for their clients right now in a low inventory environment.  

We are in a Tough environment.

The current interest rate environment’s impact on HELOCs will offset any potential benefit very quickly.

I've not invested in CA, and I'd enter that market extremely cautionsly based on various rent control issues, eviction issues, and the political environment seems to be very unforgiving for landlords. 

The debt adverse angle is going to pay off in a higher rate perma-environment.