I would suggest looking outside of OC into San Bernardino County or riverside county if you want to get over a 5% cap rate.

Any suggestions?  

or do you suggest a grace period?

Suggestions of companies etc?

@Simcha Davidman seek for a local wholesaler and learn the trade, you will get the best deals that way, I agree with @Judy P. when she suggests to start with Single Family, what if you really don't like being a landlord of one family, how will you handle multiple? 

Anyone suggestion some up and coming states?

I would suggest that you check out our local real estate investor groups.

In terms of building this team, a suggestion was made that I should have a good team before going into deals.

Although there are still challenges (as with most older towns) things have been steadily improving for many years now - most residents love the place and are excited about the many amenities & general direction of the area.I would love to find a local wholesaler or other sources of good deals - any suggestions on where to look? 

I'd suggest joining the local REIA, the Bluegrass Real Estate Investors Group, They have regular monthly meetings.