You would think they would want to get a non-performing asset off their books immediately, but like @Troy Norwood said sometimes they sit for years without anything being done.  

Unfortunately a lot of states write the laws in the tenant's favor, so I've heard of tenants stretching out some landlords as long as 6 months without paying rent by delaying the court proceedings.  

Have non-refundable earnest money that keeps growing with contingencies in the original agreement and with each extension they ask for.Have a (right to continued marketing clause ) where you can kick out their offer if they do not perform.

None of my properties do, and the capital tied up in them continues to perform just fine.That said, it's more difficult to find a property locally where the free cash flow is better than, say, the dividend income thrown off by investing in a Blue Chip dividend mutual fund.If you're looking at small Multifamily properties locally and want a first pass "rule," I suggest using a GRM target of 12-14 as a first screen, assuming you're looking for a property that will throw off free cash flow with a 70% leveraged mortgage.If you want to more than basic long term buy it and hold it, you can do it.  

I stumbled across a parcel of land that seemed to have potential, and I performed the requisite preliminary market demand and economic feasibility analysis.

You would first have to distinguish between performing and non-performing notes.  

Is it possible to buy a Bay Area house in this market and have it perform well as an investment?

If you bring no capital to a deal, you need to bring a record of accomplishment, extensive experience and knowledge.  

Just a plain old boring lease with a security deposit made, move-in date on the lease to be about 3-4 weeks after you intend to close on your new purchase.We can use rental income to offset PITI on your old house, fixing your DTI.After that lease is up, evaluate the performance of your old home as a rental property, and either keep or sell it at that point.

Again, this is just based on experience and having a very extensive background and knowledge of the entire Cleveland marketplace.