Interestingly, they have a graph that shows my market is perfectly on track at 4.5% appreciation per year over the last 20+ years, 2003-2012 is just a big zig zag in the middle.

It is in a perfect location for us.

In a perfect world yes, but it never stays perfect for long.

Personally I would rather have a solid lower cost property bringing in money now rather than trying to find the perfect situation. 

Hey, nothing's perfect right?

I would say you know of some areas in your local market that could be perfect for this strategy at a price point around 100-150K for purchase and rehab of 25-50K, you can parlay that invested money into double what you have and keep going.

It seems that if you were hot to sell it would be perfect for you but I understand the quandry.

Many folks move to an area and want the perfect home in the perfect neighborhood etc, and think that will make all the difference...

I have the chance with my day job to go to 1/4 time May-July which presents me a perfect opportunity to sweat equity into a remodel, and hire out still over half of it.  

And also if it not being permitted is anything to worry about as long as it is still safe and perfectly habitable.