Thats at least how most PM's pitch their business' - owners have bills to pay as well, in the case here the PM failed to secure the rent payment but still took their fees out of the security deposit. 

@Piper WatsonPay down the credit cards as the chances of earning a return that is at a greater interest than the credit cards is very rare and risky.

You'll still owe taxes on the depreciation taken during the time it was a rental, typically at a marginal tax for bonus dep recapture.

Main house (under)rented at $1200 a night average and the casita $300 a night. 

I would think that at the closing table, the owner would have to clear the IRS lien with the sale of the property and then come out of pocket. 

I live in the SF Bay Area and have decided to buy my first single-family home.I fully acknowledge and recognize that the SF Bay Area and California (in general) may have some of the worst cash flow numbers in the entire country.I've already traveled to cheaper Midwestern states to look at real estate opportunities, but have decided to invest here in the SF Bay Area as I'm purchasing with the intention of living in it first and foremost, and then renting it out sometime in the near future when I move overseas.I'm looking for anywhere in the Greater Bay Area/Northern California region (even Sacramento & Central Valley is okay) with better than average purchase price to rent ratio, and some appreciation (if possible). 

Looking at a potential deal, but want to avoid pitfalls.  

Will you live at home to save money?

The second year, they all of a sudden at renewal sent a notice that I'd be required to have carbon monoxide detectors in each bedroom. 

(Case and point the BOI you’re referring to) I’m convinced of this because there’s clear exemptions in place to shield yourself or at minimum hedge against BOI liability.