I know it takes time to start to see cash flow so I have already put aside 6 months of savings that will sustain me based off of California's cost of living.

I plan to use real estate investing as my primary retirement nest egg and as cash flow to sustain me after retirement.

Sustainable cash flow was the real goal here for my first deal in KC, so getting my cash back would be icing on the cake.

You actually will need to take it out to sustain your lifestyle. 

Buy and hold investments will give you long term sustainable income.

Close to intown I see crazy prices that are not sustainable, lot's of old houses falling apart with lipstick on them and over valued, high property taxes, aging county and city water and sewer systems (some 100 years old), etc.It's just not my cup of tea but other people love it.

I am not sure your rent on a SFR will sustain a higher mortgage.

No way to sustain that so I will not be investing in Cleveland. 

That will open a LOT more doors and give you sustainable income if you work it. 

. §1.165-9(b)Property converted from personal use(1) If property purchased or constructed by the taxpayer for use as his personal residence is, prior to its sale, rented or otherwise appropriated to income-producing purposes and is used for such purposes up to the time of its sale, a loss sustained on the sale of the property shall be allowed as a deduction under section 165(a).(2) The loss allowed under this paragraph upon the sale of the property shall be the excess of the adjusted basis prescribed in § 1.1011-1 for determining loss over the amount realized from the sale.