My speculation based on current estimates to repair, that I would be looking at 45-60,000  .I guess, my point is in current condition condition I would feel lucky to get $1000 a month in rent, if fixed up in a minor fashion. 

If the California home prices dip down and your $500,000 condo become a $400,000 condo, just ride it out until it comes back, it always does.When you know more about this business and have decided on what to do, then invest.READ Rich Dad Poor Dad and pay attention to what he teaches.Good Luck!

In addition to a main house designed in this fashion I would consider adding an accessory dwelling unit that could be rented out. 

Uber and other ride share programs have sufficed for them.

With so much riding on the appraisal, is this just too risky to get involved in? 

The obvious consequence is that I might otherwise be able to defer these costs another year, two or five if I ride it till the end. 

Another option (I believe is an option), setting up an LLC in some form or fashion where the LLC is a single asset in the SDIRA but funds come and go through that single entity (or the SDIRA loans to that asset who distributes the money to the borrower). 

Ride bikes, walk, etc. and you'll learn your community and what it's like.

Lauderdale area throughout Dorian and to this day still find it fascinating that most are not prepared in any fashion.

You can run Due Diligence (DD) in a consistent fashion.