Off-market deals are key if you go this route, so networking is huge.Out-of-state investing is another option people love, especially in markets like PA (Philly, Scranton) or even down south where prices are lower, and the landlord-tenant laws are more forgiving.

Consult your local CPA to calculate accurately and minimize your tax liability.

What paperwork should I keep a paper trail of to make things like taxes and other situations better/easier for myself?

I don't think our detroit land bank sale properties with tax liens I would have to look into that. 

According to our understanding:1) California does not recognize REP status, but we could claim it on our federal taxes, is this correct ?

Hi Steve, where did you get your property tax estimate from?

Due to current interest rates, many CAP rates are much lower than they should be and usually there is only so much price discount a non-delinquent seller will be able or willing to offer.

@Rafael Ramos All your goals contradict each other:(1) Cashflow: buy Class C & D properties2) Appreciation: buy Class A & B properties3) Low Crime: buy Class A & B properties4) Why would you want your investments to lose money to lower your taxes?

I think the economy has a number of diverse employment options, lower prices than King County while still being within driving distance.  

Most on this forum can't even come up with a downpayment, you can't expect them to ride HOI/tax increases, vacanices, etc., with lower leverage and less cash flow on a property.