Based on the latter approach, you can essence acquire an infinite number of properties. 

I've been given lots of advice but we have some challenges.  

Once you approach 10 gpm electric power demands would be prohibitive for standard residential electric services. 

Yes you will have to set up a contract, usually that is something to approach if the property wouldn't be sold otherwise most flippers want to get in and out of a property as quickly and with as little hassle as possible.

I look at every single item in the pro forma and imagine that it is complete BS, and see if I can challenge it.

Material breach of rental agreement is easy to proof; however, it is something that can be fixed with reasonable effort or expense, while keeping the contract in effect, it's less likely to be material.I am aware that the California eviction process is simple, however it certainly becomes complicated once the tenant decides to challenge the eviction.Any insight would be greatly appreciated.

The appraisal should be based on the Income Approach with the Sales Approach given secondary emphasis.

Pros to this approach would be lower starting cost (I am still saving up money for a down payment) and not having to deal with tenants.

Real Estate Investing has given me the opportunity to quit my day job, create passive income, and free a lot of my time back up to be able to do what I love.However, with each new "level" of success brings on new challenges and hurdles along with that stage of the business.I am curious to know: What is the #1 Struggle in Your Real Estate Business Today?

Your call, but you should not approach this thinking like a homeowner.