Where to buy?

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I currently live in Pleasant Hill, CA.  I am saving for a down payment on a 3 BR 2 BA single family home that will eventually become a rental.  In this area, average prices are through the roof, $600,000 for what I am looking for on the low end.  My plan is to buy a home and live in it for a few years while I save and hopefully build equity to purchase another home.  The first will become a rental.  I grew up in this area and our families both live here, so we want to stay, but also want to get out of the rat race if we cannot afford it.  Our household income is about $150,000.  The main goal for us getting into real estate is to build passive income through buy and hold rentals to fund retirement.

I have a few questions:

1) How many times my household income should my purchase price be?  I have heard no more than 3-4 times?  Is that accurate?

2) Does the 1-2% rule apply to areas like the Bay Area where housing costs are so high that rentals are less than 1% on the purchase price monthly?  

3) Is the Bay Area a better place to invest than a place with less economy even though house prices are so high?  We have considered Sacramento, Bend, Corvallis, parts of Washington state.

4) Is there an immediate rush for me to get in considering interest rates are so low? Or is there potentially a bubble/peak that we are at? I would have to go FHA if I wanted in now.

5) What are some tips you have for areas to buy that provide the best buy and hold cash flow properties?  I have heard blue collar, 1100-1200 sq ft, 3 br 2 ba, single family homes.  

6) Do you produce more cash flow long term by buying the same home for $600,000 in the Bay Area compared to $400,000 in Sacramento, Oregon, Washington, etc?

Thank you for your help!

[Aaron Vergason]

I know there are some good podcasts from people why have bought in high priced Cali.  If there's anything within an hour of you that you can make the 2% rule work, that would be good.  3 Br 2 Bath is definitely the most easy property to get out of someday if you needed to/ wanted to.  it's also a good rental setup.  I would not worry too much about the interest rates being low.  They have been low for a long time and they won't jump up over night.  it would be a pretty slow climb.  Also try to buy the least expensive house you can find, I wouldn't spend more just because there's a 4x rule or something with your income.  The best way to get out of the rat race (IMHO) is to keep your expenses low (Including your mortgage) and get some rentals that have positive cashflow.