The other lien appears to have been rolled into the existing, modified $160K loan (the principle, interest rate and end-date all changed after the other lien was signed.)How do we deal with these?  

On the opposit sight i drive my truck to Los Angeles and back all the time.

This is an area known for frequent sightings of wild animals.  

But my wife and I travel quite a bit, which I told the principle who assured me that it wouldn't impact my travel or family schedule and that everything could be handled by effective scheduling.So on the surface all looks great.

Establish your own set of operating principles and execute to them.

The payment would be really low on this note and you could pound the principle with the excess rent and in no time have it paid off.  

I think those looking to get into out of state rentals and expecting to make some huge equity upside are going to be disappointed.The reason I believe one should look out of state is to build a portfolio of properties that they otherwise would not be able to do at home due to a much higher market entry point.I think the real benefit with these out of state portfolios (that is often overlooked) is being able to enter at a low market price point and be able to benefit from principle pay down. 

The rest of their business interests can be purchase with a note to them, they will have interest income and taxable principle as it is allocated over their basis in the business.This transaction is accomplished inside the business entity, you don't need to convey title of the property. 

I have three principles: Communication, Coordination and Confirmation.

@Tricie Stephensdont be short sighted, anyone in this business should have contacts.