Getting three or four checks each month instead of one per property helps some.

PITI is $522, but you also have to account for maintenance, vacancies, etc.It definitely looks worth investigating further!

But you're asking someone to hold a piece of real estate for you - that is worth some amount of money if you are truly serious. 

He also observed some active water penetration into the basementI am trying to figure out if it’s worth it to look into fixing it and trying to make the deal work, or if I should just keep looking for a different property.

If you're in LA and want something you can drive to check out Las Vegas.

We would NOT need to order a 1007 market rent report if we had either:1st months rent and security deposit2 months of rent deposits (canceled checks)If it’s a departing residence we could only use rental income to offset monthly payment (we couldn’t use extra income if 75% of the lease was 3,000 and mortgage was only $2,500 I couldn’t give $500 of income to boost DTI unless he has moved out of the home for some time and we have 1 year of history of being a landlord (which it sounds like we do, just not sure if he’s just moving out of this home).

I owe $100k on the house and it is worth around $320k.

I assume you’re checking to make sure they literally still live there.  

No cash flow real estate investing can be frustrating to newbies... you are doing all the work, and not seeing any 'pay' for the effort except on paper where you property is worth more.  

For the future you should have a check list of items to refer to.