I did this on one of my properties last year and was able to significantly increase my cash flow on that property as well as buy another good cash flowing property.  

This property will need about $75K in rehab and the market rents would increase between 5% and 8% once the rehab is done.I am trying to figure out what expense ratio to apply to this opportunity.

I do like CA as an overall market as the population is increasing, housing is scarce, and property taxes are fairly low (1%). 

Again, not mandatory but seems to be more common as the concern increases about the health issues related to cesspools.Mark

It "should" appreciate over time- both in terms of the market value and due to rental increases.

lie to my agent and me stating there is another offer on the table can we increase offer price to stay under consideration? 

Could end up hurting the sellers in the long run as they may be increasing exposure and reducing prices.It's not uncommon for sellers to request larger escrow deposits on vacation homes.

Now we stick to multi-family because of the economies of scale and ability to force appreciation through value adds and rent increases. 

Property taxes are public record, so you can use previous years paid and estimate a slight increase.

The reason for me is that I can increase cap rate by not paying HOA fee every month(7 units x 200)..Any pros and cons?