Dry the area well.

Or should I keep my powder dry and save up cash to pick up multiple deals in a year or two once the market softens or corrects? 

I too work for the family business in CA...our family business is RE investing and I purchase out of state properties and have PM companies manage them for me...I stopped acquiring properties 3 years ago when cash flow dried up in many markets...buy a duplex with your VA loan?

@Chris Baker  There is a water heater pipe which has asbestos and apparently the dry wall had some in it as well.  

I mean there are some glaring obvious issues standing out like a full rotted and soaked wall, broken windows etc. 

I wouldn't have to work done and open myself up to "well, now that we're replacing this trim we are finding more wood rot" or anything like that.  

I saw today on the news a few apartment complexs with water up to the first floor windows which mean first floor flooded.. my experience in Katrina when I looked at a few apartment complexs there post Katrina that had flooded.. they needed to be completely vacated.. and bottom floor and some times top floor dry wall and every thing ripped out.. mold grows there like nobodys business its like living in a petri dish in that area of the country.  

dry rot, financing type?

Are they saving us money in the long run or bleeding us dry?

The house doesn't get used, debris in the low spot (plumbers sometimes call these "bellies") dries out, catches more debris and turns into a clog and causes the noted backup.