On the other hand, having a first position lien on what sounds like a historically performing mortgage vs. second position doesn't seem like it is super beneficial--you have been getting the benefit of the bargain you struck back then.  

@Jeff Filali, I also understood I can sell the note later on as a performing note if I need the cash.

You cannot shift your financial obligation to another person without consent of the party who is owed, this is a unilateral agreement where the lender relies on specific performance of that borrower, they never had an opportunity to safeguard their investment with Joe Blow, this places the note holder in a position of accepting risk they otherwise would not have accepted.

The note is a performing loan.  

In addition send him a cover letter detailing your disappointment with his performance via the cost over runs, the nepotism of the GC, and anything else that needs to be said.Let him respond and see what he says.

The contract in and of itself is promise to perform, and if legally executed constitutes a binding agreement. 

Prices do cycle and you must be able to withstand a period of depreciation but historically So Cal coastal prices have performed better than appreciation for any longer term duration.  

There are plenty of investors out there like me that want proven performing rental properties that already have tenants placed in them.

I’m going to keep my eye on a few specific rentals to see how they perform in the coming months to get an idea of demand in different areas.

Do you typically perform home inspections when buying from a whole seller?