If he does not recover any funds for my clients, they do not pay him anything at all.

You have to understand why an appraisal is required, and then you can understand why the value for SFR is going to be based on comparable sales.The lender wants an appraisal to get a value for the collateral, so that in the event that there is a default on the loan, and the collateral is seized, the lender can recover the principle amount remaining on that loan.

The area I invest in, in California has not recovered yet.

The economy has yet to recover and there are good workers (all legal) willing to work at a great price which in turn provides us at a better savings equaling a better profit.Again, would it be wrong to say the average bid in Austin for carpet was $5,000?

Safe rents but lower cap rates.Contrast this with the Midwest or the Northeast where you can pickup rentals for well under $100k in bad/recovering/gentrifying/undiscovered neighborhoods that produce amazing cash flow but many more headaches. 

Don't get involved with a deal large enough that if it goes sour, you can't recover.  

The personal  property of the tenant must be moved to a place where the tenant can recover it  without unreasonable difficulty. 

If I did what he was doing I would need a 2nd job to pay for the loses in my "investment". 20 years to recover his initial investment and bleeding cash every month during that time?  

Pursuant to the Chicago RLTO, a provision such as this is unenforceable and If the landlord “attempts” to enforce this provision a tenant may recover two (2) months’ rent as penalty, plus reasonable attorneys fees, and costs.

Also you forgot another regional factor, SW Florida is one of the few appreciating markets that hasn't fully recovered due to the insane overdevelopment going into the crash.