We have a chance of an off market opportunity, with income generated from bonus room and bathroom off garage.  

Great story, keep your expenses in line, improve the property, keep it occupied and you're all set!

Bed bugs can last for about five months without a host so if it sat vacant longer than that, there's little chance they would have survived.

The exchange company said that depending on the IRS auditor (in the scenario I was audited) they would see that the property was purchased in my name (solo), and then placed into a trust with both my wife and my name, therefore eliminating 50 percent of the exchange benefit.My Attorney setting up my trust (out of state) does not think this is an issue because California is a "common law" state, My Exchange company thinks there is a sizable chance of this happening, and my CPA is split between the two.

The chance meeting with the tenant means more to me than seeing inside.

What are our chances of making this happen?

HOA fee - If HOA fees are not paid, business will incur fines, so it is necessary to make the profit in the business.8) Marketing expense and advertising9) Cleaning and maintenance10)Commission (Expenses like commission, abstract fees, recording fees to obtain your mortgage are not deductible but rather capitalized )11) Insurance12)Legal and other professional fees(Tax preparation for business, not personal part)13)Management fee if applicable14) Points- you generally cannot deduct the full amount the first year but have to deduct them over the term of the loan.15) Repairs (Note always do repairs rather than improvements to rental because repairs are deductible right away and do not have to depreciate over few years as done for improvements.

As the area improves I believe proximity to the lake for recreational purposes and proximity to the train to downtown will be a key factor for people moving into the area. 

Could you by chance elaborate on that more so when I start looking or when anyone else who is new to the concept and reading this will  have more of an idea of what it is?

My guess is no chance.