But from a cash flow perspective, you can get a good used THOW for a fraction of the cost of an ADU, so you can recoup your initial investment a lot faster. 

Being new to real estate investment, jumping into the game in an area with such high competition scares me.

Is the market just very competitive and are other investors just being more flexible with their offer?

I have been looking at properties for many months.Not only is the market competitive but people simply go for appreciation...

As a local investor/lender in the So Cal market, here's what I'd recommend given the info on your post:1)  Investment deals are extremely competitive in this market. 

In some competitive markets, you may pay $400/lead, or you might pay $50 depending on the overall strategy.

I have until Wednesday to close on the final condition which is viewing one of the four units that wasn't viewable on the weekend.Won the deal in competition.

It'll probably mean you ultimately have a better property than a lot of your competition,  and potential tenants absolutely notice and appreciate this.  

What does your competition do?

I figure this list must be really competitive and that the owners are just getting a lot of mailers.It is getting about time to hit the list again which will be my third pass I and I am debating on whether I should continue mailing to this list or cut my losses and find a different target market to mail to.Thoughts???