@Dina Harleth I am going to assume that your PM is also a licensed Realtor and is using the California Association of Realtors standard contract, if this is the case they will almost certainly not be willing to change it partially because it is against the California Association of Realtors terms of service and could also affect the contract as a whole. 

I would have to assume they would have to do option 2...I thought i'd ask about option 1.

That is about right for a down payment, I would double check your numbers, or possibly ask people on BP to help with it though, because that would seem like a pretty good deal assuming it is in a decent area.

This number isnt taking rent increases into account.Looks pretty ok on paper (unless I'm missing something and it doesn't)The breakdown for your first example would have the sponsor (who I'm assuming is me in this scenario) receiving:Acquisition fee: $1,750Asset MGMT Fee: $672 80/20 split when sold in 10 years: around 25KAnd since this is a smaller deal a more basic approach of 70/30: 4895/2098 or 8% back to investor annuallyDoes this seem to check out?

Assuming the new tenants have no interest in moving whatsoever, I would use whatever low-cost legal options I could to drag things out until a year had gone by, at which time I would empty the unit and sell it.

Assuming the getting educated part is included in the pick a niche and sub-niche. 

I assume at that price point, you are in the real bad part.

Assuming PS doesn't ban R1 rentals on June 5th, a vacation rental may be a very viable strategy. 

I'm assuming that the land will hold no value since it's already captured in the main house on the property.

Unless you have something in writing from property managers saying you can break the lease on the 15th, without fee, it will be difficult to argue that they were letting you out. right now it is a "he said, she said" situation, assuming everything was verbal. billing you prorated rent for January is your only indication that "maybe" they were letting you out early with no fee. if you took this in front of a judge, which is what you will need to do to recoup your loss, it would be up to him to decide who is right and who is wrong.many counties have free legal aid for tenant issues. my suggestion, run it by them and see what they say. if they agree with you, a strongly worded letter may get you your money. if not, you have to go to court, and you will have to decide if half a months rent is worth all that trouble.