It sound s bit like a scam to me, especially if they are willing to fund at that high of a percent. 

Sounds like constructive fraud, but you probably need a legal pro to help you.If it were me, I would double check the lease and the application and look for a clause that says something like "applicant / tenant affirms that the information provided is accurate and true". 

Anyways, I’m looking for someone to tell me if my strategy is flawed, sound or could be done better.....I am 30 years old, family of 5, six figure income living in a very affluent Southern California city where six figures doesn’t go far.

Also, it sounds as though the agreement might be illegal and their intent is to broker the house.

Black pipe is not too bad, it's just the labor and knowledge to do it that really gets you.If you have the aptitude to do this, you can go for it.Option 2: Meter it yourself and manage the billing yourself ---> We looked into this but it just didn't sound like something we wanted to mess with and even with this, it would heavily depend on your existing configuation as far as the cost/feasibility. 

Sounds good,Thanks Colleen.

But it sounds as though I need to look at a better neighborhood for our first buy ecspecially if we plan to hold onto it as a rental.

Sounds like you have a vision and a plan!

I have found foreclosures to be much more structurally sound than the other deals I have bought. 

Hello @Michael Papps It sounds like you have a really full schedule right now which will make it difficult for you to get started.