At the same time that means to loose about 100 sqft of rec room space, so that would speak for framing right against the wall.The basement seems reasonably dry, but (not much of a surprise) the pitch outside of the braced wall is negative, which we will correct in spring.

It's not as cut and dry as that, but that's basically how the process goes. 

And if you decide owning rentals is not for you, you are not stuck with PMI and wont have to lose money to refinance to get rid of it.At the end of the day its not a cut and dry decision, many factors go into play but I would value peace of mind over the extra couple of bucks. 

I have not done anything that complex yet, but look forward to as my traditional route is drying up.  

We all know the MLS is dry and most of the deals I have come across from "wholesalers" are just trying to move stuff that no one wanted from the MLS.

Assuming you've fixed the leak and dried it out... spray the walls with your choice of chemical like chlorox.

Go get that steal of a deal on that 65 year old shack that some poor slob might rent to stay dry. 

I'm also keeping dry powder so when the market makes a turn I would have a clue on what to do... haha.

California, especially Pasadena will suck your wallet dry.  

Just keep your eyes on the prize and learn as much as you can as you go, take your calculated risks when you're ready, and it'll just become white noise that you can brush over. tl;dr : I hear you man.