But for solid rents and ease of management it will perform in a manner that people think passive investing should be.Plus you have a very good chance at some nice appreciation over time... and yes METRO totally dictates values here.. 

The SELLERS dictate in their instructions that they ONLY want a "purchase agreement,"  and "addendum."

In our current market conditions, the market simply dictates this.Ned already gave great answers to your questions.

@Travis Reed - Fannie Mae and Freddie Mac (they purchase and securitize the bulk of conventional loans and dictate lending guidelines) implement loan level price adjustments, where different types of loans carry different pricing.

I don't have current remodeling experience like your addition project would dictate but based on the numbers I hear from folks, there are no $100/sf additions.

Guys, depending on where this thread goes will dictate if I continue to contribute.

@Jeff B. is right on - the QI must be in place prior to the closing of the sale and the dates of that closing will dictate your 45 day identification period and 180 day exchange period.

That being said, I would think the HOA would need to prove the occupant is smoking in non-designated areas.Do you have anything in your lease that dictates the tenant needs to abide by the HOA rules?

So the 1% rule is a nice rule of thumb, but don't let that dictate how or where you invest.As far as California is concerned, getting a keeper that meets that 1% rule can be done more easily in some parts of the state than others.  

I bet there are many opinions in appraiser forums as they'd like to control their silo just like anyone else but their job is to evaluate based on what banking rules dictate.