And then there are lots of standard CA mortgage contract templates out there... just make sure your lawyer writes in every clause and snag to protect yourself.

I'm not a lawyer (and am not giving legal advice) but that seems like a huge liability.

I don't have a lawyer suggestion for you, but once this is taken care of I'd be very interested in a followup.

Or do I need to call a lawyer?

I have read all the forum post related to foreclosures that I can find on here, and I guess I wanted to check my process and invite anyone else to give me advice.The recommendations I have been given/ read most frequently are:Have a title report performed as close to the date of sale as possible (2-3 days depending on how long your title company needs) Try to find a title company that is willing to sell you title insurance after a judicial foreclosure.Perform extra searches yourself for any items that are excluded from the title report.Calculate the expected value based on the best comps.Drive by the property to get an idea of current condition.

Hello Jake,I am not a lawyer, so I am not qualified to tell you what to do in regards to protecting yourself from liability, but I can share with you what I do.I like to keep rentals in their own LLC's as I think they are the most likely to draw a lawsuit.

I would consult a lawyer to see if there is a legal way based on your lease to evict the offending tenant.

@Nick Hakim - I am not a lawyer, but it does not sound like a grey area. 

Point is, I don't think I will even put in 500 hours into flipping houses this year, which I believe is one of the conditions for active income.

The house is in decent condition, maybe needs a few minor upgrades and rough cleaning but other than that, it's in a decent location and a solid house!