Why Invest in CA?

[Scott J.]

A little background:

I've lived in CA my whole life and bought my first property about 2 years ago. It's a two separate structures on one lot (1300 & 600 sqft) and was around $500k. It's a historic home (property taxes reduced by 60%) and in a great downtown area in Orange County. I currently live in one and rent the other, but if I were to rent both out, I would barely make positive cash flow.

I will be buying a 3 or 4-plex in about a year in the $500-600k range. Out of the best deals I can find (top 10%), cash flow is typically only $200-500 positive per month. We are buy & hold investors.

My point:

I always read about deals in other states, such as Texas, where investors are buying $150k properties and having $400 monthly cash flow. My question is, why invest in CA? I know you have the higher likelihood of appreciation. But is it worth it?