The fact that both of the tenants also have felonies is concerning as well.I do rent to tenants with dogs but I require that they submit proof that the dog has been spayed and neutered and that they obtain renters insurance which covers the dog.

My concern is that rent in OC is not as high as some other areas nearby, such as Portland...so the rental fee would likely be only about $50-$100 more than my mortgage payment (my payment includes insurance/taxes, by the way..so I am accounting for that).   

Well, these were her specific words "The only thing that can be rolled in is FHA upfront mortgage insurance premium, which I have already done.

The lender will need a "condo questionnaire" completed, along with the budget, insurance and contact for the management company, to make a decision about lending.   

My background is in insurance.

Investing in CA will maximize your equity/loan pay down (vs cheap properties out of state), maximize the total value of your treasured fannie/freddie loans, save you travel expenses, leverage your money to higher appreciation, low property taxes (as a ratio), and low insurance rates (as a ratio).There is no rule that you have to invest only for appreciation or only for cash flow.

It is possible/feasible or unheard of to request that the previous owners file an insurance claim as the damage occurred before I moved in?

As paid contractors they would need their own insurance coverage.

$1450 + $1250 = $2,700 per month$350K @ 5% = $1,879 per month 2% property tax = $583 per month $2,700 - $1,879 - $583 = $237That’s $237 for insurance, vacancy, maintenance, cap-ex, maybe property management, etc.Or do get even more simple, $237 * 12 = $2,844 which means that one month of vacancy means all of those other categories above (including mandatory things like insurance) are all out of pocket.

Get title insurance, and definitely get a survey after all other things are a green light but before you close.