That leads to "hoarding cash" either in a checking account or in equity, because rule #1 of investing is don't lose capital.So I propose an Option D: Invest $100 in something you think is worth $120, but was worth $100 and it corrects to $75; you still get a 6% return, but now you need to pay to add value, which gets you to $100.

The only thing I would watch out for are the rules and regulations imposed by the city of Seattle for rentals within the city limits. 

A JV contract would stay in each parties possession, but in the event of a disagreement, you may end up in a civil court battle with no way to cloud the title until the judge made a ruling. 

If she fights you the fees run about $1500 but less than that if she doesn’t fight.In the meantime, play by the rules don’t make any mistakes and don’t get emotional.

I'm not a CPA, but I do know the depreciation rules.

Most properties around here that come up for sale on the MLS don't even get to the 1% rule.

I am still learning the art of evaluating the deal using things like COC return estimates, IRR estimates, 70& rule, 1% rule, etc. 

As a Southern California investor, keep in mind that properties are expensive in most areas that are desirable - you aren't likely to find the opportunities for properties that meet those "1% rule" or "2% rule" that you'll hear investors in some other states talking about.My personal preference would be to find a nearby property to start learning the ropes with before you go for something more distant, and that would help you draw a circle around your home to allow you to start digging into neighborhoods and getting a feel for prices. 

I'd like your guys' opinions on if this is a good rule of thumb or not.

@John Warren 10 years of cash flow is a great rule of thumb!