Make sure you get every single bit of documentation needed from the homeowner to submit your package.  

My husband thinks we do not need to have them sign a formal month to month lease, but I prefer to have all steps documented.  

I have a ton of notes organized in a giant word document.  

A documents attorney and a fightin' attorney.  

I will document my experience as I go.

Just to clarify,  the seller never actually provided us any use or certificate of occupancy documents for the property.

It looks like your county recorder uses a third party service for title documents which will be spendy if you don't need it for heavy use  So you will have to contact the recorder directly or find a title company that can help you with this.The other free way to quickly check is through your state's GIS department which has an online parcel map.  

Let me know if you have any questions. http://homeguides.sfgate.com/documentation-needed-...

I'm sorry you're dealing with this.Your first step is to document what has happened up to now.Your second step is to return the security deposit OR send an accounting of how you spent it and return anything left over within 30 days.This part is very important.

Your investment is at the mercy of the association and its Board of Directors.Some associations welcome investors and are renter friendly and others despite the governing documents permitting rentals are not rental friendly at all, which leads me to my next point.In addition to the REI due diligence you're already doing for the area, the property, rent etc. another very important aspects of this purchase are the governing documents.I would advise anyone who is considering purchasing a townhouse within an association to carefully read the governing documents before making an offer on the home.