(Foundation, etc)4) Black mold, asbestos, lead paint, other other costly repairs. 5) It need significant cosmetic repairs where the purchase price just isn't worth it. 6) They may have an odd layout of the rooms. 7) Non-compliant septic.8) Trouble with permits or tenants9) Listing agent has a poor or incorrect listing.

I feel like the initial investment is a little inflated.

Those "cash flowing" assets are likely to appreciate below the rate of inflation as well.

While real estate investing aims to achieve financial freedom, this is only possible if you invest where rents outpace inflation and there is significant, sustained population growth.

@Patrick Roberts wrote:"@Jay Hinrichs I know of one person who is buying high LTV preforeclosures Subto while they’re off market by paying the owners around $10k-$15k to walk away, quit claiming them into an entity, then seller-financing the entity holding title to the property to owner-occupants under the pretense that it's for commercial purposes on interest-only balloons at inflated values."

Our economic system has inflation, which favors the banks, baked into the system.

Seems odd as this would be a business expense for my business.  

Next, I tend to recommend that clients stay away from inflated HOA fees.

This is the question I was going to ask....you are bucking the odds by staying in SoCal.

I would have to agree with this - appraisals are no exemption to the general inflation/rising costs of the past few year s- $750 is hardly outrageous and investing in non-warrantable condos and with HOA restrictions is always going to have a risk for hiccups