Demand and supply have been forcing SF prices up and will in my opinion (short of a major crisis) continue to do so.

They will be forced to pay soon enough.I would take a completely different approach.  

If you are buying value add properties, a good chunk of the profit (and IRR) should come from #2...forced appreciation (and that usually happens in the first year or two of the investment).  

If auctions fail to get them the price they want, they are forced to buy back the property and then list it on the MLS with an agent.If it's a bank owned property, the MLS data will say so.

Long delays can force a lender to order a second appraisal to ensure the value of the property.

Second, I don't understand how one can "force 10% appreciation" under the circumstances described.  

We've also had the app randomly drop certain features (like the entire "spa" button on the app) after the main unit in the house was accidentally unplugged.....forcing us to uninstall and re-install the app while testy guests look over our shoulder.   

I don't know if a spouse would be treated any different for the situation you described.In general we force each spouse to submit an application, and we have asked for additional deposits or denied based on poor credit from one or the other.IF someone falsified an application, and I could prove it, then for us it would be an automatic disqualification, and we would encourage our tenant to move out, or at the very least not allow the other person to move in.  

Its not uncommon for a second mortgage to foreclose, you buy the property based on that second mortgage foreclosure and discover a big first mortgage that is still in force. 

Also, he can't force you to buy his property.