However the rent is low and once I increase the rent to market value, it will be around 18% Cash on Cash return. 

A bit long on the payback but add in any value increase to the property from doing it, including its increased attractiveness to condo conversion down the line, immediately better cap rate, etc...and it could be worth it.  

Increased Transparency in Commission Fees: Investors will have more clarity on what they are paying for.

Bought at below retail, financing via FHA to lower downpayment and increase ROI What was the outcome?

Putting the money into principal INCREASES your risk in 2 ways.

If the city believes the unit was rented in the past, they will force you to legalize it as they no longer offer demolition permits and San Francisco's ultimate goal is to increase housing stock.On a side note, you can read more about TICs as an investment strategy by searching the BP forums.

I would by real estate in cities that have seen large negative decreases in sales prices but are still positioned for population growth.2.

This brings tourism even higher in these areas based on sheer population proximity. 

The potential income on the timber, and the increasing land price over time.How did you find this deal and how did you negotiate it?

Right now, i'd say leverage is your friend, rates expected to come down, which will only drive demand therefore increasing home prices..