You do a 1031 to a new, larger property with even more depreciation.

I've had them long enough to keep pushing up rents so that I am at the top of my niche, but know not to exceed it because I'm just about at the point where if I raised rents another $50-$100 I'd be crossing over into the lower end for larger units.

How much does the $500k renovation add to your property value?

Those are great options for rolling renovation costs into your mortgage.

Landlord-tenant regulations are a bit complex in California and getting hands on is the best way to learn before expanding into larger investments. 

Network in person, see if they have a publication where you can post your deals and what you are looking for, and if there is a larger annual conference for investors locally consider getting a vendor table to talk about your business and what you are looking for.

Would it be buying more of the same type of properties or expanding into larger properties?

I bought a single family home for cash in November, did the renovations and now have tenants.

I would highly recommend doing a renovation loan like the 203k or homestyle - you are able to leverage SO MUCH CASH for such a low down payment. 

I'm sure it's a little more efficient in larger cities, but my market requires up to 60 days to get approval.Lower your expectations with Section 8 tenants.