It feels like I'm not even close to winning bids on SF houses where the #s barely make sense, and forget multis as there is a lack of inventory. 

Barely starting to look at prices now

Some of our property owners don't want to raise for good tenants and others will do the bare minimum.

There is only so much you can do to a bare lot to increase its value,  prior to the house site being determined. 

Here's the breakdown of all the cost and incomes:home purchase price: 140k, rent per month: 1100 (RTV=0.79%)Income: 1100*12 = 13,200 per yearDown payment 30%, interest rate 4% => mortgage per year is 5,6001.5% property tax, 1% maintenance, 1.5% home insurance => another 5,600 per yearPM fee: 10% rent per month + 100% rent for new tenant (assume tenant stays for 3 years) => 1,320 + 1,100/3 = 1,686 per yearTotal cost: 5,600 + 5,600 + 1,686 = 12,886 per yearThere's barely any cashflow and does not even include the vacancy time between lease, legal fee in terms of a dispute/eviction etc.So the question is, should I try harder to find 1% properties in these areas, or there's something that I miss in the calculation above?

As a lender now I feel like the house probably barely qualified for FHA financing, those loans require a more move in ready house which it was but a lot of the big ticket items needed to be replaced within 2 years (HVAC, roof etc).

Unfortunately he missed 3 months and barely made payments the other months.

You are barely over the 20% downpayment threshold (if the lender will give you full value credit for your land.

You bare full responsibility for how you decide to run your business and it takes a lifetime to build a reputation and seconds to destroy it.

BTW even with all his efforts, the finished curb is barely acceptable (it is a lot of work to fix a badly poured large curb (this curb is over a foot wide).If you go with the unlicensed contractor, the price should reflect the increased risk associated with using the unlicensed contractor.