So when the deals are happening then buyers have lot's of cash stuck in properties with low or no leverage that are hard to access.The one that used long term debt at higher LTV's now has more cash sitting on the sidelines for the down turn to scoop up properties and has to rely less on financing to make it happen.

You will have negative cash flow and will only be able to rely on appreciation to profit....extremely risky.Additionally if plan A is a serious option for you then you are a very low risk investor and may want to reconsider directly investing in real estate and may be better off putting your money in a REIT.A investor, assuming they have the ability to move, would sell the CA property and move their money to where it can actually produce positive cash flow.

So yes, always rely on prevailing local market conditions....but expecting some huge correction, they simply do not happen very often.And looking at simply the price of a property is a mistake.

If it is zillow or the assessors office they typically can't be relied on for true market value.

I soon realized that this arrangement will not work as I could not physically inspect the property and could only work on MLS properties since I relied on an agent to do all the hands-on work.

I would not rely on zillow for the value. 

Do not rely on it for legal advice.

I have done this and it does make the mortgage attainment easy as they rely on the JV partner.

Do not rely on it for legal advice.

You will come out of it wil plenty of expertise in the details of renovating 100-year-old properties, but this is NOT passive investing by any stretch of the imagination, even if you somehow do manage to turn this place into a profitable investment while relying on the tender mercies of hired help.