Maybe split the cost of putting in a large, non discreet security camera?  

Also, never allow a handyman to begin work without getting a quote from him, even if it's only a verbal quote. 

So, instead of threatening, I would approach the seller with additional non refundable earnest money if you fail to close again by 9/15.

These usually call out how a foreclosure would proceed...Judicial or non-Judicial.   

- Any obvious risks to investing in the area (such as non-sustainable economic growth)?

During the initial loan period, my goal would be to subdivide the second property (have been given a verbal ok on this by the city zoning)   and then put a prefab up which will also yield $1500/month.   

It's a rare out-of-state private lender has both of these.The real answer to your question asking, "How do I vet a non local private lender?"

The function of individual leases (which do not designate bedrooms) is to provide the tenant the peace of mind that they will not be held financially liable for non-payment by the other occupants, and to give us the ability to take enforcement action against individual occupants without having to involve the other residents.

Depending on the type of financing and your financial strength, you may have to bring someone in beside you to guaranty the loan (assuming you can't find a non-recourse loan)

Since you're in San Jose, I'm willing to bet that your original cost is the lower of the two.Use your tax assessor bill to determine the percentage that is considered land (non-depreciating) and the percentage that is considered depreciating rental property.