After 6 months (once a month) I go to standard letter or postcards.

Of course when it comes time to exercise the option to purchase, then everything goes through the standard purchase process with title/escrow, notary, county clerk, etc...  

It may end up that you give all your proceeds to the bank first and you take your profit on the last couple of homes (which is standard).

If not, then it's a standard 10%/20% down and figure those payments. 

That being said standard association master policy does not exclude coverage for water damage that results from poor craftsmanship of a contractor under any circumstance .

Would you pay off the heloc or just make the standard payment and keep all the cash for additional purchases?

Rehab them up to Market standards and/or improve the operation.  

Is this a red flag in regards to the plumbing systems or is this standard?!

That being said, you can get an idea of what standard documents look like for conventional loans here: https://www.fanniemae.com/singlefamily/security-instruments

INSPECTIONSIn the standard California Association of Realtors lease that most CA landlords use,  there is a clause that allows for entry w/ 24 hour notification, including to inspect the unit for maintenance purposes.