Properties are so heavily inflated.

If everyone uses the rip off vendors just because insurance is paying the bill, our insurance rates will continue to inflate.

I can think of scenarios in which an unscrupulous buyer will have the work cost inflated in order to get the entire holdback (or split it with the contractor some way).

The new rent control caps annual rent increases to 5% plus inflation, so effectively 7-9%, but it does not apply to Single Family Home rentals unless they are owned by institutional investors/corporations.

It's purpose isn't to make money, but to be available to jump on an opportunity while it mostly keeps up with inflation.

There's also the fact that unions have much less bargaining power today than they did in the seventies, so that greatly decreases the risk that price inflation would keep up with monetary inflation.

Most of my other investment properties were SFH that I purchased with the intent of renting them for a few years, then selling for an inflated price, usually to the tenant. 

Cap rate on $21k is 6.4% Is the property in a decent area where it will appreciate higher than inflation rate?

I believe the most likely scenario is the next few years will be flattish (i.e. appreciation near the inflation rate). 

Secondly, land doesn't typically appreciate more than inflation without structures on them.