BMR Housing San Francisco vs Sacramento Rental

[Robert Jensen]

I have been putting offers on houses in Sacramento. I have been living in San Francisco most of my life as a renter (24yrs). I just won the lottery for a BMR 1 bedroom in Hayes Valley for $250k.

Ultimately, I would like to stay in San Francisco and invest in rental properties or flips (I used to work for a contractor so can do most, if not all, work myself with a hired hand). However, this BMR apartment is seemingly too good to turn down. There are stipulations though regarding being able to rent the place. However, there are certain circumstances where I may be able to rent at BMR, though have to ask permission. BMR is a bit restrictive, though would solve my issue of wanting to keep San Francisco as my primary residence.

Other option is turn down the BMR housing and continue with Sacramento, with hopes of flipping, etc to eventually buy a $800k Market rate place in San Francisco.

I am in my 40s and, ultimately, would like to start passive income. 

So back to my question. Is it crazy to turn down this BMR condo? It does appreciate based on AMI, which could wind up beating appreciation on real estate. Its hard to get data on AMI though but it seems salaries keep climbing in SF with the addition of more towers and cost of living for the employees. however, Sacramento real estate seems very hot right now. Eventually I would like to get in the game and this BMR could set me back 3-5 years. 

I'm completely 50/50 at the moment given my goals. Any input? Thanks

[Robert Jensen]

Appreciate you taking the time to give advice. Its great advice (every 5 years) and a goal I am going to reach for. 

"but work at a job that apparently allows you to work remotely" - not exactly. I can work from home 2 days a week. I would be driving 1.5hrs each way or staying at a girlfriends house for however long. I know people who have had 1.5hr commutes each way for 15 years so I think I can do it for six months or so. Also, I will be looking for a new job soon after I get the place situated. Maybe this will be in Sacramento... 

San Francisco has been my home for most of my life. Its hard to leave but as you mention, it doesn't make much sense to stay unless I get a higher paying job here where the numbers pan out. If not, it is a money pitt and has been for a long time. Its easy to get complacent here. Its quicksand.