The home values continue to rise but slowly the evidence of the culture and people that made the community are long gone.

For instance, an inflated appraisal.  

I did start my career in architecture, but have spent the better part of 10 years in construction management building everything from a 500 sf basement remodel to 400,000 sf high rise hospitals on large green field sites.

There are several variables here I have yet to work out, such as, the exact working in the Note (I want 50/50 profits, you may want to pay only interest), when exactly to record deed of trust (if you record deed of trust prior to recording trustee's deed I doubt it would rise to the level of being a lien), do I give trustee's deed, note and deed of trust to my escrow agent and get a lenders title policy thereby insuring the lien and allowing me to possibly sell the note.  

We personally look for *good schools*houses that appeal to a class A neighborhood so we can self manage from a distance*houses who's mortgage is less than rent*houses in an area that will experience appreciate higher than inflation to preserve my investment

Pays a 10% yield and it's got some growth potential.The market was spooked by the threat of rising rates late last year, and so income investments like REIT's have sold off, presenting an opportunity for savvy long-term investors to get good yields. 

But, there are still plenty of opportunities to go around, rents will only rise and if you run out of four-plexes to buy, you can always start building new. 3D concrete structural printing is just around the corner. :-)

I would expect current cost indexed for inflation at 3% per year compounded annually.

Is the average rent you quoted based on 2BRs, 3BRs, 1BR, SFR, condos, high rises, or all lumped and averaged?

Not CA & FL kind of hot where the prices are inflating without regard for real value.