I am considering purchasing in Lower Dimond and any of the directly adjacent neighborhoods.

Yes, that means he will have to give up his 3.5% rate (or whatever it is assuming lower then today rates) but it is what it is. 

Some Investors also underestimate the timeframes of the rehab, especially here in CA.

For $10K and a lower rate I'd be willing to consider delaying...but only if I knew that lender two was solid on closing in a relatively short timeframe.

What is the time frame for everything? 

As you suggest lowering down payment to buy more properties is one way, although the downside is greater risk in event of down cycle and more time to manage required.  

As far as timeframe, anywhere from 21-45 days depending on how quick a borrower gets their docs to underwriting, how long the appraisal takes, etc.

I would remove debt to a 7-10 year time frame and lower fixed costs, at minimum.

My mark up is always lower than the direct lender because I don't spend money advertising during the Super Bowl or buying a private jet for my CEO, and we don't have layers of management we need to pay.

I'd see how next 2 weeks go before lowering the price.