I have not yet been buying in a hot market, but sounds like you are doing all the right things.  

super hot markets I see this no problemnot going to pull it off in markets were retails sales average 6 to 9 months to sell. and that is many makrets int he US of A

There is also an FHA 203k loan which you could use to do renovations but you may need to look for slightly less desirable properties in the hot areas ones that have been sitting for quite sometime.

If easy to rent out, is this just for you or is the rental market in your town that hot?

Since the market is hot in CA, no contingency offer has a great advantage to stand out.

Here in my market (which is very hot as well), agents routinely price a listing just a little low to generate a feeding frenzy.  

If you are familiar with the market and RE transactions, and if the market is higher end (class A/B) and hot, then yes you can easily sell it via flat fee listing ...

Also if you are in hot market with low inventory, the competition will be fierce. 

For all I know he could be putting it up for a ridiculous amount and see if anyone bites just because the market is very hot.

Our market is white hot, I actually look forward to someone leaving because the current market rates have shot up through the roof so we adjust accordingly.