Also, don't choose your deal solely for higher cashflow because you're splitting it.

I think that whichever option you choose you are still heading in the right direction.

Markets change, demographic change, laws change.Step 1 to getting into REI is getting some base knowledge and exposure, from there step 2 is evaluating your personal situation, resources, hurdles, preferences and choosing your own individual strategy and starting REI formation, no book can say what's best for you, a guide can't say you need to start as a wholesaler or a flipper, HML, Joint-Venture, etc etc etc.. 

I'd give them two options, both with 30 days notice: 1) Notify them that rent will be increasing to $850 and a 12 month lease is required OR 2) if you are okay with them staying month to month, rent will increase to $900 for a month-to-month lease arrangement.Whatever the number you choose, just make sure that your MTM rent is more than your LT rent option. 

Also, SiteLink manages the payments.... you don't need another service, it's built into their system if you choose to add that module. 

So it is squarely a business decision you will have to choose, good luck.

@Folarin Komaiya yes the seller should save about 6% of the purchase price in realtor fees so if you choose not to use a realtor I'd try to get at least 3% off of what similar properties go for. 

South Pasadena is also not developer friendly, and their city planning department is terrible, so just be aware of what you are getting yourself into before you choose to move forward. 

Make sure whatever option you choose that you are using projections that are achievable.  

If I spread it over 30 years again, this would lower my overall mortgage and I would hit positive numbers immediately (especially if I choose to increase rents to market rates as well).