If so, will I have an issues selling this property in the future?

The problem you will run into is that since once its on the internet, it is there forever, future buyers can see those pictures and if they find them and ask if you had it remediated and your response is "Umm, ya I killed it with bleach" they are gunna walk.

I know it depends on what it looks like inside, but does this spell disaster or extra future expense?

Considerations are how much for the option to purchase/ (the right to purchase at a specific price in the future) Ideally for you the answer is zero.How long to exercise the option?

I have had an inner battle since day one when planning/projecting future business growth.

Seems like this would sort of kill the future possibility of STRs?

It can save you thousands on taxes as well as future liability problems. 

Sounds like a lot of Extra Strength Excedrin in your future if you go that route.

I am a big believer in being patient on the buy - aggressive on the paydowns as my tenants pay me monthly cash flow in the present and monthly principal reductions for the future.

And if you bought in CA 5 years ago in most markets you got to ride the appreciation title wave that those that dont invest in CA say you should never do and your just lucky but there are tons of lucky millionaires in CA that this happened to.So you need to define what a deal is how much work you want to put into it. and in my mind if your in the mindset of cash flow real estate for the remainder of your life then dont get put on the side lines becasue you think the market is a tad to high or that some future event is going to create a buying opp ..