I wouldn't be buying in CA.Growing up in the SoCal area, yes the appreciation has been great the past 20 years; but they way the state is headed, people continue to leave.Red tape in California has caused business to evacuate, high net worth individuals are also beginning to exit the state.Food for thought.

As others have mentioned, the percentage of savings you get back really depends on your individual tax situation, including your tax bracket, state, and other factors.

Now I'm faced with a choice: Buy for 10k more than the appraised value and get good ROI but start my real estate journey underwater, potentially move into another REI property, go to another bank and hope for a better appraisal price or walk away. 

With my experience with very wealthy individuals who have complete freedom of time, one common denominator is: Keep it simple and a little boring. 

or you said my hypothesis is wrong, it has to be depreciate 27.5 years and no other choice. 

Each investing strategy is totally dependent on the personal goals of the individual investor.  

Our choice was to repaint and put in new carpet to replace the new carpet they damaged. 

And I have been a PML business owner for a decade so it was an easy choice/chance for us to take and had access to funds to pay it off when rates jumped and our interest earnings was negligence compared to the risk. 

With your own capital and access to other individuals you know well that have capital you could start that way..

These 2 individuals appear to be a mother/son.