If you perform the repair personally, you have to be reasonable in charging fair market rate. eg. if it takes 1 hr of your labor for some handyman's work, $20-30/hr is reasonable, even you're probably paid much more in your own line of work.My suggestion is to first fire the PM who obviously wanted to skim some profit by inflating the repair cost while exposing you to lawsuits (remember you're in CA - a blue state and San Jose - a city with rent control).

@David Carte The lease says Landlord allows reasonable subleases.

I would like to hear from all the experts here reasons why I should not consider these properties or if you have any horror stories to share, please do.Thanks! 

I wouldn't mind keeping that tenant if the rent is reasonable but the owner won't show any lease agreements or proof of income/expenses.Thanks for your thoughts on this.K

I live in Boston now so I’m slightly removed from the markets I would like to buy in, but is there any reason to expect a correction in pricing?  

The reason you hired a management company is to ensure quality tenants.

That's one of the reasons I'm hoping to be able to diversify into real estate in an informed way. 

I would definitely give them a reasonable amount of time to get things sorted.

You kind of have to infer, by asking the right questions, that they have a reason to sell.

There is no reason for you to go through all the leg work of finding these at times because the real estate investing community is usually very kind and can provide this info