I've never bought from a wholesaler - most of the deals I see from them are either not in my area or not really deals - but I can see certain situations in which they could provide value.Unfortunately, a good percentage of them are really just acting as unlicensed real estate agents, and an even bigger percentage have no ability/means to close on a property even though they assert as much when they sign the contract. 

I've heard a lot about contract for deeds and I've been doing research on what it entails.

Most turnkey buyers do not have the time to obtain a level of sophistication of education as to what a D Class property truly means and will entail.

Thus, you're adding principal reduction into your net income equation, which as you just said, is incorrect.As I've pointed out, others have pointed out and even you pointed out with your Wikipedia article, cash-on-cash return is calculated without principal reduction factored in, and therefore it's impossible to have negative cash flow yet positive COC return.Which was my original assertion and is still the case...

The thought of giving up my 9-11%appreciation AND my 6-7% rent growth AND my LOW LOW Prop 13 tax bases to get some "more" cash flow now by investing in the mid west with all the pitfalls that that entails is just is not attractive to me.

Ben also asserted that in the single family world, comp analysis is used to value property.

I don't necessarily want to invest in SF, mostly because of the extra workload it would entail.  

Be friendly and understanding of their situation but assertive and clear about your intentions.

Can someone explain to me what The Colonial Act of 1994 entails or where I could read more about it?

All the best, Gerri   I think as long as you assert yourself as the one in control in a professional manner you'll be fine.