I found out someone was in the house when receiving notification from my security cameras.

People are free to look back and dislike prices paid or not, if they want to waste their time playing the "coulda, woulda, shoulda" game, that's their own problem, it's got nothing to do with you and nothing to do with the value of property today. 

They gave proper notification per terms of the lease that they were moving out . 

Also as soon as the tenant payed you get notification that that transaction was made so you know they are on time.

It's not. If

Not if it was on a property I was hoping to bid on. :-)

The answer is you don't take $700k cash and buy an $800k primary, at least not if you're really a great investor as you suggest.

In every real estate transaction you engage in, have three exit strategies, one of which is what you will do when (not if) the real estate and credit/debt/currency bubbles burst as real estate did during the "Financial Crisis".Keep in mind that residential properties lost approximately 50% of their value then in a very short period of time.  

You renting the house out knowing about the issue is a bad idea also.Why not if you have good credit get 0% interest same as cash and make small payments over time?

I always recommend talking to tenants when able...verbal or written notification and the accumulation of lease violations is the best approach...if the violations rise to a breach of the agreement, eviction goes a lot smoother.Best of luck