Their “ROI” figures are low at 5-7% even for the lesser cities, and on closer inspection these ROI numbers do not represent a reasonable cap rate, which would be even lower.

State taxes should have a minimal effect on evaluation if you live in CA (excluding property tax) because my understanding of how the income would be taxed is (state income was generated in taxes first if it is a higher rate than CA no further tax, if it is lower rate CA takes what you paid the other state into account and taxes the rest of the way up to their normal rate)  Hopefully that made a bit of sense it is difficult to explain in text format.

You could pay a lower price at a higher interest rate to satisfy her goals.Work the numbers.

Save until you can invest in a good area where you can get decent tenants, I didn't say good tenants but decent to lower the barrier of entry. 

Saying that i'm comfortable and realistic with this rehab estimate and hope to bring in the construction at a lower cost. 

If so, how do I go about negotiating a lower purchase price or seller's assist to get some additional funds to fix the mold.

Lower unit is where the owner lives or lived.

I understand townhouse/condos are more of cash flow plays (vs. appreciation) so wanted to get in at lower price to be cash flow positive...hence the recommendation ask.Specific community names would be appreciated...e.g. one I'm aware of is Meadowridge townhouses in Coppell.

In March of 2016, she refinanced to a 20 year mortgage at 3.5% because it was going to be our new primary home and we felt at the time that it made sense to expedite our payments and lock in a lower interest rate.

There are some asset-based lenders that do not keep this rule, but they have lower LTV ratios and require a greater percent down.Hope this helps.