At minimum, I simply want a few income generating (ie high cashflow) properties to supplement my life and to hand to my kids to supplement their income when I am gone.

You have to know yourself- are you super busy with three kids and a demanding job?

I would assume supply/demand would keep prices normal and killer deals scarce.

Specifically Desert Hot Springs, as it seems that you can get a nice 3BR/2BA with a pool for under $250k, and based on AirBnB searches, there is a fairly strong vacation rental demand in this area.

Do it when you are most comfortable as long as you are managing with your present income.Having a young family is extremely demanding and time consuming, investing can wait till the time is right.

I am curious to see if this increase has impacted the real estate demand in the markets you are familiar with.

High demand area will not matter size of unit.

Figure out either an internet business(either dropshipping, ebaying, affiliate marketing, content creation(writing, reviews, videos, etc)(dude, start a blog now, put content on it, you put your story here, you can put it on your blog and eventually it will rank, even more as you progress your life improvement strategies))    ------    or start a super low overhead service business to start and run(think mobile/stationary car wash&detailing, cleaning service, maybe high demand time uber driving etc), or one possibly related somehow to real estate (if that is your interest)- like Landscaping(not maintenance-due to high equipment costs).

So, the Future says that "units" or Apartments and Rentals are where the Demand will be.

If anything there is more demand for cheap housing.