Without the high leverage you reduce the top source of return in CA RE which is achieve via the appreciation on a high leverage property.  

And DIY repairs are not recommended for other reasons: it will take you much longer to complete, depriving you of rental income, and you run a high risk of your wife becoming your ex-wife.Same risk exists if you push your wife into becoming a Realtor or some other real estate activity just for the sake of tax benefits.

For example, should we focus on acquiring one high-quality property in a strong market, or would it make more sense to spread the investment across multiple lower-cost units in emerging areas?

If you find yourself in a similar situation, I highly recommend exploring the gift of equity deals and using sweat equity for renovations.

Most agency loans will expressly forbid such an arrangement, so if they found out, the odds of having the loan called would be very high. 

If anyone tells you that you can get 15% cash-on-cash it's either a scam or ultra high risk. 

Additionally, high-income earners with modified adjusted gross income (MAGI) over $250,000 (married filing jointly) may be subject to the 3.8% Net Investment Income Tax (NIIT).For 2025, bonus depreciation is at 40%, so consider leveraging it for eligible property assets like appliances or fixtures to accelerate deductions.

While having high standards is important, it's worth considering that many Section 8 tenants might not meet requirements like a 640 credit score or $90,000 in household income.

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Some lenders even do as high as 1.3.