So essentially because the NOI when you buy it is lower than what you believe you can make it, you are buying below market value.

I would rather make a little less and still acquire an asset then lose out waiting for lower interest rates.Brandon Turner briefly mentions this on podcast #294 that people can spend a lot of time worrying about interest rates and potentially miss out on stellar opportunities along the way.

These two and lower are perfectly acceptable as rental areas.

I would take a slightly lower return for a more passive investment.  3) the amount of riskI could take the money you would use to pay down your mortgage and place it in something very passive and somewhat low risk such as the S&P 500 long term (14 years is long term) and achieve far greater return (historically probably double) than what you will save by paying down a conventional home loan. 

I've noticed you can find duplexes and fourplexes in Cleveland easily, but because of higher property taxes I'd need to buy in lower C / D areas to make decent cash flow (this is just my initial research).

You can absolutely use that to lower the price of the property, especially given the more intense hurricanes and rain patterns that are predicted.  

If I were you I would buy a primary residence elsewhere (the lower the down payment the better as long as you are comfortable with the numbers) and rent out your current Silicon Valley place. 

That's just a first glance, but that might lead one to lean towards Sacramento as a play for appreciation and rent increases over time, but lean towards Stockton for cashflow today since the prices are lower.... up to you what your goals are.Anecdotally, you hear a lot more people saying "I'm taking my high income job working from home, and moving my 'home' to Sacramento, and just driving to the Bay Area once a month for the monthly work meeting!"

I know this is what everyone wants, but I’m under a crunch with the 1031 time frame and figured I’d ask the experts.I’m looking for anything in the $350,000 to $600,000 range.  

A GC is forbidden by law to ever ask more than 10% or $1,000.00 which ever is lower up front before they ever starts working on an project and then they are limited to a 10% over and above all the costs of doing a project, market rate requirement.