Don't forgot about the hidden costs of shoe mold/baseboard.

Dont hold or buy bad deals, but it sounds like yours are all sound deals so I would continue to hold if I were in your shoes

So my question is, if you were in my shoes, would you 1.) buy in a growing market like this now with smaller cash flow (and ROI rates) with the assumption that rates will rise, 2.) wait for rental rates to increase before buying with the potential of purchase price continuing to increase as well, or 3.) move on to outside markets for buy & hold deals.I know there are often deals to be made in any market (just have to find them).

Put yourself in the shoes of the investor.

I will show a place when we're talking about still lacking trim & door painting, shoe molding, cabinet knobs, finished outdoor landscaping, replacement door locks, caulking, etc.

If I were in your shoes I would focus on the process of subject to deals and understanding how they are structured to determine if it's what you want to do. 

If I were in your shoes, I would put in the contract that $10-$15k (depending on cost of property) stays in escrow until the house is vacant, with the stipulation that if they do not leave on time that money is used towards their eviction costs.

You aren't the only investor from the Bay Area in your situation, I have several other clients in your same shoes.

I used to be in your shoes due to the lack of knowledge.

If i were in your shoes I would tie up the property with a 120 day inspection period then light a fire under your broker to go out and find a tenant.