I imagine with the right buyer and a solid contract/expectations it is possible.My biggest issue would be the appraisal.

Assuming your numbers are correct the property is not good cash flow for a rental even using San Diego's low rent to value expectations. 

I expect the HELOC to be about 150k.

You'll either decide that you can get the rents and property to where you expect them to be regardless of what the current owner has done.

The other way is you'll get hit with special assessments when you least expect it.

Do you expect better cashflow or appreciation in Phoenix over the next 5 years? 

When the bust came, as happens in rolling markets, the house prices came down, as expected.  

I expect my income to be lower in the latter years so I am ok with that. 

Set clear definitions of expectations with both students and parents prior to lease signing and why there has to be a break between current tenants and their lease start date. 

Buyers and sellers want to work with full time real estate agents, and if you are working with client, and are not as responsive as todays consumers expect you to be, you could jeopardize your own credibility, and the brokers/agencies.