So in some ways it is similar to long term buy n hold in an area with no appreciation (i.e. even if it has cash flow today in real terms it will only go down (taking into account inflation)).

No other people will buy at that inflated price level, except those newbies who are brainwashed by the TK marketing people.

You need to review credit and cut out high expenses and then conversely analyze your current job and what it is paying with potential for increases and advancement over the years.If the job pays very little to keep up with living costs and inflation it will be very hard to get ahead and have extra capital when opportunities present themselves.That is what helps me in that with commercial real estate I can make big chunks of money at a time with clients buying properties so I have cash to make investments.

It is a hard task to do in certain (or most) areas of the country with the inflated prices we are seeing these days.

So they buy commercial properties where they can get 7% coc and up in other states.Once people have made millions they are usually happy to outpace inflation and make about 6 to 10% cash on cash and protect what they have made.

If you are doing your analysis correctly (well, what I consider correct, that is) you'll underwrite your exit using today's cap rate and then inflate it somewhat because it's likely prudent to assume that cap rates will go up in the future (at least I think they will, others may feel differently). 

Is this common or is this an inflated rate that needs to be formally argued and reduced? 

Banks wont let me self perform anything and this could really inflate my renovation budget.

I also just want to point out that, even though you are self employed, you can't just choose to stop writing off certain expenses in order to inflate your net income.While the IRS certainly won't care if you inflate your income and, therefore, the taxes owed, the mortgage company will certainly care that you have over-represented your net income and it's more generally labeled as mortgage fraud.Whoever told you that you "if I want to buy another property, that I cannot write off much this year to show "more" income", was advocating mortgage fraud.If you had 5000 in office supplies, you write off 5000 in office supplies and if you had 6000 in advertising, you write off 6000 in advertising. 

Isn't inflation a tad higher?