If you're planning on selling the property soon, it'll be easy to get a realtor to advise you on what renovations attract buyers and which renovations bring higher sale prices. 

While this is not advisable in some cases, it's also not unheard of.

Thank you very much for your advise !

You shouldn't make an investment for tax breaks only - spending $1 to save $0.30 isn't advisable but if that's the goal for you, you should take proactive steps to ensure you will be achieving that goal with your investment.

My advise would be to focus on the sales side first and once you get comfortable and confident making money that way, then look to develop a management arm off of your sales business.

@Akshay Lala, obviously dont take this as legal advise but when financing a house through FHA, to meet the owner occupancy rules FHA requires that you use this property as your primary residence for at least 12 months after the loan closes.

But you could also get a lot of free advise on this forum.

You could go back to the Seller and advise that you do not qualify for financing at the amount noted on the contract due to the failure of the properties to appraise.

I'll have to see what my lawyer advises as well.

They are (presumably) licensed in California and should be able to advise you accordingly.