If you can stomach losing it, you sound like you will be ok eventually.

Eventually I would like to fund these deals through doing 1-2 flips and / or spec houses a year.

Over the years I've worked with brokers that would figure out 6 different ways to do a deal and then we'd compare them all against what the specific goal for the deal is.Mike I felt I didn’t need a broker for a simple cash out refinance but when you look at the bigger picture of the eventual purchase and go backwards to the cash out refi maybe it’s wise to use one. 

., the strategies to profit, especially in a takeover situation) in the past and eventually let it go to chase simpler things.  

Despite every plumber telling me that speaking with the city and the utility company was a dead end I was able to eventually get to the #2 guy at Citizens, the utility company.

There may be some legal and title complexities that arise if there is an open escrow and they sell the property to someone else after you.Personally, when faced with a similar situation regarding the release of an EMD I made it clear I would not budge, even if it meant the money sat in an escrow account for years... they eventually conceded.   

What I am trying to avoid: renting for 2 years to eventually end up getting a condo/duplex later on or the flip side investing so much into a condo/duplex, and just overall not having it make sense with this situation.

But the house is only 10 years old, it's huge, it's in a decent area that's still being developed (Eastern East SF Bay Area), and it has the potential to earn us some money.Does the earning potential of the house make up for the headaches of renting in CA and having to pay a boatload of taxes on the equity when we eventually do sell?

Will they eventually pass legislation to include it, who knows. 

There's a couple of things that make this more attractive than the other option sugggested of forming a new LLC to own the property.First is the expense and reporting involved in another LLC entity.Second though and more important in my book is that by having your LLC own a TIC interest and having your partners LLC own a TIC interest you keep the utmost flexibility available to you as you move forward with that property to eventual sale and possible 1031 exchange.