And when I do, I get outbid at far beyond asking (which I'd be open to do if I were buying a primary, but seriously eats into the already small margins from an investment standpoint) I’m from California, and I know the market is in a major upswing here, do you guys feel this is the case nationally?

That $1300 seems reasonable to me, but if you can only get $1200, your margin is getting much slimmer.

Although for many this may seem as "competition", I don't believe the margins on the properties they will be offering will be large enough for investors to even consider.

Then you write off (or depreciate, as appropriate) their value, plus you have a (marginally) smaller loan on the house, which means less interest paid out, etc. etc.  

I would prefer to get more than one door but things are priced too high to have a good enough margin to refi.

Profit margin for some people is less important than (or at least equal to) pipeline. 

What it tells me is that now is not the time to buy and you should consider selling marginal properties and focus in building your cash and systems for the next housing downturn where you’ll be able to find 2% properties.

Time for a cpa call because these margins are too tight to sell on a swag.I wouldn't necessarily rule out a 1031. 

Building was reassessed, so taxes went up, eating away at my non-existent to negative profit margin, and making this financially more precarious. 

This is an off-market deal, and I will probably not go into contract without some inspection contingencies given my margin for error on my first deal.