Hi @Todd Fithian,
My wife has helped investors make money in less desirable cities of Hemet, Perris, Lake Elsinore. Their strategy is to find the cheapest house in the best neighborhood that has some cashflow. They have a longer buy and hold game.
Hemet is a mixed bag.You have old single story homes, duplexes and lots of farm land - and it smells. The people that usually move to this area cannot afford to live somewhere else, or some for the convenience to get to work at Soboba Casino.
The equity gains opportunity is most of these places has come and gone. @Aaron Mazzrillo is correct in that the equity gains have flattened out. This is due to affordability again. If people are going to pay that kind of money, they are moving back down to Menifee, S Winchester, N Murrieta.
Now that being said. Affordability is escaping most people who live in Temecula and Murrieta. Prices are approaching the levels of pre market crash. So we see the disparity between rents and mortgage payments grow. As a result have seen rents increase by about 20% in the last couple of years. There may still be opportunity for cashflow if you can purchase a property at the right price.
Hope this helps.
