But in reality, the inspections are geared towards retail buyers who are looking at nitpick flaws.

Would it be better if I paced the acquisition more to provide a longer and stable track record?

I'd say your resale opportunity and retail buyer pool are likely a challenge.  

the only type of property I see going down on cap rate is office and retail but anything residential will go up

HI Cort,Most of my lending business it out in OC and debt to income ratios for many borrowers have really been stretched and this is in an area where many people have very good incomes comparative to other parts of the US too.Incomes are not going up as fast as home prices are and the only real thing that is keeping affordability in check are the mortgage rates.Assuming we dont veer off the track of full doc income/credit/assets we will eventually hit the glass ceiling in terms of qualification and the market will in theory not be able to absorb inventory at the pace it has been in the last 2-3 years when this ramp up started Jan - Mar 2013.If I were you I would look at the cash on cash returns on the equity and the risk of the asset in the market that its in (Indio) and figure out where to most efficiently position that equity to achieve your preference of return, safety, and ease of management.What I do recall is that riverside and San Bernardino counties got hit really hard back in 08-11'.

If I was to build a new house and sell to a retail buyer the entire value of the house is subject to sales tax, not just the build costs (i.e. the government is applying sales tax to the land in addition to the new build).  

Of course, there were also renderings  from retailers during the process of buying a new kitchen.  

So the second fund now asks for bids from retail asset disposers, such as Granite.  

If you can get this for less than 20% down, it's not a bad deal, but you're definitely paying retail for this property.

Investors looking to flip and retail buyers aren't willing to pay for homes needing work.