At one point it felt like homes in BCS were selling like hot cakes but now I can find homes that have been sitting on the market for quite some time.

For YEARS I have watched and envied the guys in North Orange County who have bought small, outdated but solid, SFR's in Yorba Linda, Anaheim Hills, Brea etc. for $550k-$600k, done nice, one month cosmetic rehabs and then quickly sold them for $700k-$750k.

Anything extra is icing on the cake as long as the property cash-flows enough.R.

This is just icing on the cake in the case you want to hold it. 

I think you can have your cake and eat it too.

Also, listed/on-market deals are low-hanging fruit, amateur hour, honestly, so you can't have your cake and eat it, too, as far as, yes, you have the risk of a buyer going around you, and if you pitch an on market deal to a buyer, many them of them are turned off and feel you aren't really adding value by brining them something that anyone has access to. 

If you make money, icing on the cake!

you get your base rent and most are happy with that.. and Co pay like appreciation is just icing on the cake.. at least when i had a few hundred section 8 doors..  

Have you thought about option 3 where you have your cake and eat it to. 

Same with Anaheim.