For the past 2 years I have been observing the buy and rehab activity of single family residences near Studio City and elsewhere in A+ areas of Los Angeles.

I've also been eyeing New Jersey (Hunterdon County) and Pennsylvania (Bucks County) as potential long-term living locations for myself and have even been a passive real-estate observer of those areas for a year or so now as part of my research.

I'm not an expert, but from my observations/conversations with the electrician, I believe that the issue is that the Romex has been exposed to the elements and has degraded. 

Just an observation, but you need to be more firm with your tyour neighbor.

The things you observed during your walk through, plus the fact that the seller lied to you about the year the property was built should be all the info you need.

Alexander is this based purely off your observation from MLS listings?

My emotions and my bank account tell me to invest NOW, but my business sense tells me to wait until I can observe renting out my current home, collect some data and experience and continue to learn. 

If you have the time, I would go to your cities magistrate court one morning as an observer.

As observed above, this is a question for your attorney.

Tell them what you want to do, and that you need to learn and observe a little first.