@Kevin Fox This is very informative, thanks for the info. These numbers look pretty impressive. Yet several observations:
1, They manage themselves, and thus avoiding ~10% management fee. I do not live in SD, and must hire a property manager. If I factor that into account, the COC will drop to around 5%. This is not that impressive, given the level of leverage.
2, No offense is intended, but, in general, agents tend to overplay the numbers a little. As you say, you just closed the deal, then these are all pro forma numbers. I will downplay the number (lower revenue and increase cost) by at least 5-10% to start with. This is my personal opinion as well as some famous property managers', such as Ken McElroy in his book The ABC's of Property Management.
3, You are maybe one of the best agents in SD, and this may be one of the best deals you can find, I guess. I, as well as many remote investors, am not as well connected and familiar as you are in the SD market. I won't be surprised that my projected COC will be lower than yours, even if I hire a SD agent.
4, Finally, you give an example of >1M for an investor with little or no money to start with? Of course, multi-family houses generally offer better COCs than single-family houses or single townhouse/condo. If a 4plex can offer just ~5% pro forma, what about a single family house priced at around 500k or less?
In conclusion, you showed that maybe some multi-house properties in SD may cash flow (the actual number is still to be seen), I still do not see very convincing evidence to go for SD instead of, say, Midwest. I believe the beauty of investing in coastal California lies in the prospect of appreciation. Cash flow is mostly negative or, at best, paltry. Given the current trend and volatility in the market, I would say betting on appreciation is risky. So I still say I will not invest coastal California in the near future.