Anyone currently make money REI in Southern CA?

[James H.]

If we moved out of state, I did the math of keeping our house as a rental vs selling.  It wasn't pretty.

How can you leave only 20-25% equity in a property unless the Rent is even higher or the mortgage rate is insanely low?

SFR of $1.4M value. Leave in 25% equity means you're trying to pull out ~$1M. (Whether you bought it for $400K or $900K you're still trying to get 75% out of the market value right?).

3.5% 30 yr mortgage on $1M (including prop tax, insurance and $200 HOA) is $6550. 6% on $1M takes you to $8060.

If rents are in the $5200-$6200 range for these $1.4M homes… can’t leave in only 25% equity.

A 6% mortgage on $700K with all costs (net operating expense?), if you put 50% down (or left $700K equity in), is $6200. Not a lot of houses in the $1.4M renting that high.

Of course there's the other aspect of appreciation and supply/demand/lower risk... but cashflow seems impossible unless at 50% down. 

That would be horrible use of your money's earning potential right?