Having a desire to control your own professional destiny and be your own boss is a trait shared by top real estate professionals.

If you make your desired return off of cash flow or value add alone, then go ahead.

In my desire to make the house as “perfect” as possible, earlier on, I decided to try to strip the paint from all the casing on the upper unit (note pictures of pink casing), this turned out to be a TERRIBLE idea.

After I decide on the information that I need, I determine what I will say to the owner(s); write those things down; practice going over how the conversation 'may flow', all before I make a connection.Tips:  Always focus on the desired outcome.

Its a fairly desirable area in Southern California and the complex is in good shape.Do I offer $500,000 which the NOI covers including PMI (and we are paying full price montly rental for the unit we live in)...or do I not offer because I might insult someone?

I think it all is regional and everyone should know their desired markets. 

Ironbound is the most desirable location, but has the least inventory and will yield the lowest ROI in many cases

If I found the perfect deal I could make this work, but based on the number of units sold in the area I desire, it may take a year or two for that to happen, and time is not something I want to waste.The properties that I would like to live in AND have healthy cash flows seem to be in the 700,000 to 900,000 range.

But your desire to do a 1031 really doesn't impact the situation negatively. 

For insurance, yes, having umbrella liability would be desirable if your asset can support the additional OPEX (operating expense) without significantly impacting the financial returns you and/or your investors desire.