I have had a number of (non-RE) issues with PayPal and advise anyone to stay away from them.

If staying he needs to pony up what she is owed, and sign a new lease with his name only.

I believe it's zoned as residential, but I don't want to evict the tenants, I want them to stay and lease back to them.

Those are some big goals for your first 3-6 months, but definitely achievable if you stay focused and put in the work.

I generally just talk to them 60 days before the lease expires this gives them enough time to decide if they want to stay or move out.

An estoppel certificate will show you what current rents are at.Last thing you want is to read in the fine print the landlord has given the tenant a place to stay for a huge discount over a long term.

Can I buy and sell all over California or do I stay in a specific city or county.

But it is also very crucial during this time as well to make sure the tenant stays on course.

The house is currently occupied by tenants who want to stay in the house until they find their own house to purchase (they were supposed to move out June 30th, but asked if they could stay until they found a house). 

You mentioned purchase of $400k and rehab of $150k (I'd stay conservative with this number and not use the $125k).