These usually call out how a foreclosure would proceed...Judicial or non-Judicial.   

- Any obvious risks to investing in the area (such as non-sustainable economic growth)?

It's a rare out-of-state private lender has both of these.The real answer to your question asking, "How do I vet a non local private lender?"

I love Airbnb, but we are looking to invest in future properties in a less continuously labor intensive way. 3 properties are easy enough for me to clean myself but beyond that, we would need to hire cleaners more regularly and eat into our profit. 

The function of individual leases (which do not designate bedrooms) is to provide the tenant the peace of mind that they will not be held financially liable for non-payment by the other occupants, and to give us the ability to take enforcement action against individual occupants without having to involve the other residents.

Depending on the type of financing and your financial strength, you may have to bring someone in beside you to guaranty the loan (assuming you can't find a non-recourse loan)

Since you're in San Jose, I'm willing to bet that your original cost is the lower of the two.Use your tax assessor bill to determine the percentage that is considered land (non-depreciating) and the percentage that is considered depreciating rental property. 

Copy of contract Agreement to Assign Contract for Sale and PurchaseSubject Property: ________________________________________________________________________Legal Description: ________________________________________________________________________This agreement is made between ____________________________________ (ASSIGNOR) and ____________________________________ (ASSIGNEE) regarding purchase of the above referenced SUBJECT PROPERTY.Whereas ____________________________________ (BUYER) has entered into a Purchase and SalesAgreement with ____________________________________ (SELLER) for the purchase of SUBJECT PROPERTY, and whereas BUYER wishes to assign its rights, interests and obligations in the Purchase and Sales Agreement, it is hereby agreed between ASSIGNOR and ASSIGNEE as follows:1.ASSIGNEE shall pay ASSIGNOR a NON-REFUNDABLE assignment fee of $________ (payable $_______ with signing of contract and balance at close).2.

That pretty much is the definition of mortgage fraud.....non arms length transaction, straw purchase, etc.  

@Dave DeMarinis Do you need recourse or non-recourse?