You need deep pockets to be able to supplement your tenants rent in many areas of CA to carry you till you cash out on appreciation.Your right it does not make sense to invest in the Bay area.

My plan/hope is to buy a multifamily fixer-upper, rehab the property, and occupy one of the units with supplemental cash flow after renting the other units.  

That is supplementing tenants rent and truth be told they will leave at a certain point anyway.

The cap rate here is like 2-3% for MF people often buyers pay cash and collect rent to supplement their retirement income with perhaps 70-80K income for duplex and more for duplex.

Those are pretty much all the blogs/podcasts I keep up with too and I supplement this all with the books they suggest on the BP podcasts.

Supplement my retirement pension and do something with a lump of cash sitting around.

Might I get the house qualified for Section 8, get one or more of them qualified to receive Section 8 assistance, and that could supplement their inability to pay market rent?

Good stuff that's qulity and numbers work....not cheap stuff you've seen amazing marketing material and spreadsheets for that won't perform.You could easily get to a point where the out of state properties supplement the other expenses and you increase your networth...while keeping a bay area asset.You'd have to figure out what you need $ money wise to cover and then a market that fits your budget.

Hi @Ashley Sliwa,I think this a great question that varies for everyone based on their goals, but personally, I've found it much easier to do investing part time and supplement my income and down payments with my W2 job.

Here's the IRS Form 1040 Schedule E for Supplemental Income and Loss: https://www.irs.gov/pub/irs-pdf/f1040se.pdf.