Everyone here is super nice and willing to help if asked!

I would consider the areas they live in very nice in perspective to the majority of other areas in Western Hamilton County.

You can rent a really nice home for less than you can spend buying something that is equivalent.

Ben, nice to meet you, I enjoyed your podcast a lot. 

The bank might be nice up to a point but if they find funny business going on then all hats are off.You need an attorney for direction not info on this forum.No legal advice given. 

The nice part with conventional financing is that it allows you to purchase more with your cash.

I also get the tenants approval ( actually required by the lease, but nice to get tenant's okay) to show the house. 

Realizing this RE will have huge negative cash flow, how confident are you of market appreciation (property and rent) in excess of the negative cash flow as no one invests with a plan that shows them losing money on the investment.Final thing to consider is your likelihood of coming back to San Diego and how nice a home is it for you and your family. 

I want to have a nice financial cushion on my first investment.

The people that are owed the $40k are "not being nice" and are trying to force them out of the house or pay rent.