I think there is like 4 more years of construction scheduled so the rental market should remain strong for at least that long.

Send them a text, email, or phone message asking where you are to send the remaining deposit.  

I would say my tenants have rented mainly to remain "fluid."

my contracts are structured amortized 30 years, balloon at 5, at the time that this contract is satisfied then at that time I will supply Warranty Deed and title insurance etc...  

If you have a lot of foreclosures for example, the remaining owners have to make up more than their normal fair share.

Most folks feel comfortable that a property held for a year satisfies that demonstration of intent.  

For purposes of determining the VA guaranty, lenders are instructed to reference only the One-Unit Limit column in the FHFA Table “Fannie Mae and Freddie Mac Maximum Loan Limits for Mortgages Acquired in Calendar Year 2017 and Originated after 10/1/2011 or before 7/1/2007”.Aaaaaaaand a link to the table referenced - for 2017.As of today, for VA, in the county you mentioned, it's $636,150 regardless of unit count.Anything over that, your friend is coming in with 25% of the difference assuming a full remaining VA loan entitlement.

When we renew the basement or turn over that tenant, we will push the remaining 40% of utilities. 

They are referencing California code 1950.5 but that seems applicable only if a tenant satisfies the lease.  

You will get the down payment, and cash flow the remaining rent.