That depends on a lot of personal factors such as your finances.

From what I've researched, it's the less than ideal situation to be in because of the reasons you've stated.

It's just not the reality.I don't know your wife's income so it's hard to know what you need to replace in order to let her retire but if you think you'll get her retired in the next year or 2....you will have a 99% chance of being let down.Becoming financially free, or not needing a 2 income household comes down to 2 simple factors.

I think having a balanced budget would be ideal where you allocate money into buying another property and money set aside for renovations.

But that is calculated after expenses and depreciation is factored in. 

Investing locally would be ideal for sure.  

Look for a local credit union that can offer a cash-out refinance once the work is done, ideally with minimal seasoning.

One thing to consider is that in terms of wealth building and Kiyosaki's Cashflow Quadrant, owing a rental and doing work yourself is putting you in the self-employed quadrant, not Business Owner or Investor.I think there are a lot of factors stacked against California for long term rentals, and I think you know it too! 

Flipping a brand new home likely wouldn’t bring much profit - especially after having to close twice when you first buy it, and later sell it.Maybe you have millions to spend and I’m just missing the big picture… but when I think of “income” I’m usually thinking “net income” after you factor in expenses, like purchase price or building costs?  

What do you want your ideal life to look life?