If they come dinged or scratched I can take it back to the store or get the company to give me the item at a reduced price. 

This strategy has worked well for the both of us as it has allowed her to continue her "main full time" job and it has significantly reduced my expenses.Hope this helps. 

As far as not renting for what you're told it will rent for, you can reduce that risk by only working with a turn key company that places the tenant before you close then you don't get any surprises. 

Possibly get a slightly reduced price.

This is not tax advise on your particular return but some things to discuss with your tax professional.When you say underwater are you reducing the shortfall by the monthly Principal Payment that increases your equity in the property on a monthly basis?

I want to stay in the high end market in order to maximize the cash flow per deal and reduce the amount of total property management required. 

When things get easy, it means you are not doing enough/what you need to do.If you are stressed it mean you are doing a little bit too much.. do MORE and learn how to reduce the stress.Listen to Others but never blindly do what they tell you.

, because you it will reduce your repais and capex expenses for the next 30-60 years.The problem with cheap houses is that the only source of income to pay for both capex and repairs is cash flow - after you have already paid for PM, vacancies etc.

LLC taxed as an S-corp to reduce self-employment taxes.

Negotiate a reduced price and move on otherwise you'll be holding up your property.