Premium Assets (Irvine) vs Standard Assets (Riverside)

[James Park]

Case study:

The year is 1999 and you an SFR investor. Home prices in Irvine are now more expensive to own than to rent. You see that the SFR rental cash flows much higher in the inland empire.

Looking back, was it better to own a 10 - 15 year old SFR in Irvine (need to put down 30% to break even on cash flow) or buy new construction in Riverside where you cash on cash return is 15%+. The year is 1999 and you have $200,000 to invest.
An entry level SFR 3bed/2.5 bath for a 10-15 year old SFR in Irvine trades in the low $300s whereas new construction in Temacula and Murietta starts under $180k for new SFRs built on larger lots 4bed/2.5.

Which is a better investment in 1999?

1) buy 3 SFRs in Irvine, California what are 10-15 years old what needs minor cosmetic touch in great condition.

2) buy 10 SFRs in the inland empire: Riverside

The question i want to ask SFRs investors is :

Is it better to invest in a 10-15 year old SFR in the top 1% school district which i consider as (premium asset in premium location) with 5% cash on cash return, or buy new construction in a "C" rated school cluster with 15-20% cash on cash return (standard asset in standard location.

Which real estate investment will win in the long run and why?