The prevalence of lead-based paint can vary by region, with the Northeast being at greater risk, with many more historical buildings and older homes, compared to other places.All of our properties are in the Pacific Northwest and were built prior to 1978.

I suspect 3.5% of a San Diego property will cost you less to enter than 20% OOS property (non owner occupied) that would be a good investment (note the real cheap OOS properties cannot be financed and therefore cost 100%).BTW San Diego financed buy and hold has historically produced better returns than any of those much cheaper OOS options. 

I want to know the specifics of dealing with historic or older homes in this area and if it is worth investing in them.

Take advantage of the historically low mortgage rates!

And a lot of historic homes.

Be aware that many of the neighborhoods near WMU are in a historic district, which limits your options regarding upgrades/renovations to said homes. 

In my area the cap rates are close to historical stock market return stock, so at some point it becomes a wash, and I prefer passive stock market investing to more activel real estate investing all things being equal.

So historically the statement is false.  

I am sad to think that it will be another Venice historic property demolished by a developer.

My market is actually in a small town in AZ where historical sales/asking price is around 90% for residential homes.