I would be willing to issue some kind of credit or discount if the buyer agrees to handle repairs. 

I think using the term "discount" puts you at a disadvantage.

I can not find a straight answer on this for California.  

I'd like to keep buying in this particular market, because I have a great deal going with my agent and they cash flow well.My question is, do I keep them paid off, and collect straight cashflow, with a lower ROI, or do I refinance, pull out the cash ($120,000 each), which is about 25-30% of the value. 

Simple and straight forward.

After making the very naïve mistake of letting family rent my home and having them damage a lot of the property, my friend who is a contractor ended up moving into the property with his family and fixing the damages with the agreement that I would purchase the materials, and pay him back the cost of the labor with discounted rent.

Timing might be right, people need to live somewhere, why not at your house, the one you just creatively controlled and negotiated a giant discount on  an IRR of 37%.Baltimore is on the crap list now to many who listen to nay seers , but folks need housing, businesses need space, sellers need end results; Timing  may be right if you are smart enough to see thru the crap that is going on and learn the secrets of creative financing negotiating skills, assignments and creative ways to insert yourself in the chain of title.

Buy sf retail properties at the average joe can afford (hopefully at a discount).

I ultimately found the property through my Property Manager, who had another client that was looking to sell it.When I asked about liability insurance, he said that he gets a volume discount through NREIG (which I have read mixed reviews on in BP).

Thus i wondering if to create an LLC before buying my first rental so it can help me maximize taxes. since i do plan to manage the property i thought i could open the LLC and discounts things like phone, gas etc. i have talk to other people that told me that just by having a rental i would get to some landlords tax benefits without the business. what do you guys think?