These areas all have a balance of acquisition price vs. the rents they command, and are all firmly on the upward trending "gentrification curve" to various degrees.

I can generally command 150 - 200 dollars premium in rental rates because of the condition of my properties... my tenants refer their friends, co workers and family to me when they are looking for a rental.Is that acceptable?

I don't know if you have this information avaible. but if you know where/who he work for (as in his unit) you could bring this to his chain of command and typically they will make him pay his debts, for the rent at least. for the damages I don't think they would get involved without a judgment.

Not sure about your market, but the market I operate in doesn't command that I do a flip-quality rehab if I'm going to rent out to tenants.

I just did not see that as reasonable for a home of the price range to 1) sell quickly nor 2) command a strong sales price or get into a multiple offer bid off.

The different of a few blocks can mean the difference between fairly comparable rental units being able to command $2000/mo in rent vs. $3000/mo in rent, and if you don't know the areas well yourself, you run the risk of buying something one block too far over-In return for high cost of entry and high rents, the returns are larger. 

In Sacramento, garage conversions aren't commanding a huge amount of value on appraisals, typically somewhere around $30k - $70k as just a tack-on value add, much like the appraiser treats a pool or premium lot.

Definitely would recommend talking to a local agent or property management co who can help you find a range of what rent you could command.

These cities tends to command quality tenants and they have great schools.

Additionally it might be better to take the property without tenants so you could even make upgrades and potentially command a higher overall rent basis.