@Jon Schwartz and how many of those 188 thousand are legal and contributing positively to the California economy?

If they're good tenants, I don't have a problem, but get something mutually signed and understood:1) Landlord must approve color and paint type/brand and surfaces to be painted (you don't want bleed-thru on color or surface different from rest of unit (eg matte and gloss))2) Tenant responsible for any prep needed on surfaces to be painted including wall patching or fixing texture3) Tenant responsible for any damages (ie paint on carpet) to property and clean-up as a result of painting4) Landlord contribution (if any) to be negotiable PRIOR to start

Then recently I thought, should I instead use the rent amount for the unit I don't live in, and the amount I say from the rent I pay today versus the amount I have to contribution to the mortgage as the rental income. 

You do not want to use hard money for something like this as the points and interest carry will eat p the profits fast.There are lots of ways to structure the deal and it will all depend on what the cash contributions and profit potential look like etc.

Is your friend's friend's contribution worth nearly six times what you would pay a real estate agent for finding the deal and helping you through the purchase process and paperwork?

I think the moral aspect of taxes is that people should contribute equally as able, which is the basis of my flat rate taxation dream."

You may want to submit a lower offer and see if the 1st allows a short sale so you can potentially contribute money to the 2nd since it sounds like they may want more than what is being offered to them at an offer of 160k?

I’d recommend @Dave Foster who contributes a Lot to investors here.

Thank you for your contribution 

I would how ever ask for "Seller contribution" towards closing costs between 3-4% is the norm in most cases.