There is no way this property will ever produce true positive cash flow if held long term.Tell him to sell now before th emarkets turn and he loses his equity.

Bottom line, that's a personal decision for you and your partner based upon your financial positions.

Given all the other positives with the site I am able to overlook that delay.

First deed of trust mean the sellers note is in first position which means you’ll need all the other cash or the seller finances all of it since no bank will be in second position 

Trying to "flip" a somewhat negative situation into something potentially positive and long-lasting. 

It depends on your risk tolerance but I don't like to go more than 60-70% as long as I stay cash flow positive.

They do a good job driving housing prices up and then taxing, constricting affordable new drvelooment, and regulating the area enough to maintain the higher prices levels .

Where’s some of the best places to find real estate to invest in and have a positive cash flow and good equity and return?

Based on what you wrote, you don't seem to be in a great position.

I will be self-managing the rentals, renovating/updating when necessary, handling all tenant affairs/calls/etc, and physically maintaining the property - however I will be coming in with little or no money.