A better market would be dry arid regions like AZ, NV and parts of CA. 

You may be able to find 15% down but even that is VERY hard to get and with the changing lending climate could completely dry up.

I called a company that an insurance had referred to do the drying .  

Major dry rot/pest issues or perhaps knob and tube wiring would make me hesitant as well. 

I’d rather trust a professional with a moisture meter to see if it’s dry (just after or even during a heavy rain would make me feel better) before fixing the ceiling.

Being aligned with your goals by being in the right environment is like a seed growing in good soil. - Read "The Wealthy Gardener."

I’m hesitant because of mold, dry rot, etc. what should my frame of thought be on moving on these.

Encinitas is cheap, City of SD is expensive, Vista is brutalRequirements: Stormwater management, surveys, soils reports -- these are big ticket items that vary a lot by city.

You could just pull them out and taper the soil on the slope down and plant grass.

We put a lot of efford and attention into keeping basements dry, but we still have an occasional pipe burst or sump pump fail and see issues and when you get water in a basement; carpet can be dried and cleaned, it's the open cell pad that is holding on to gallons of water like a kitchen sponge.