Where there is volatility, there is opportunity!

Phoenix and Vegas are really volatile.  

My natural inclination tells me "no" due to perceived riskiness, but as Scott mentions in the book, historical figures suggests this may be less risky and just more volatile.

- Wanted to diversify my real estate holdings, felt I had too much in the Bay Area - and in the next recession/market softening, I want some cash flow that's more protected from market volatility. - Because the Bay Area is such a boom/bust environment, I wanted to cash in on the equity I had built up on my most recent purchase (the SJ condo) and move that money to a more stable real estate market. - Areas I looked into, Indianapolis, Atlanta, San Antonio, Cleveland, Memphis, parts of Florida. - First filter - any city that I read about that had good purchase prices compared to rental income I considered.

Maybe wait it out a few years to see if this trade war and market volatility drops values and turns everything into a buyers market.

Now we are working on shoring up our balance sheet some to set up a new round of growth in the future.Higher return properties certainly are more volatile and require more work.

I'm surprised this is publicly available, but enjoyed reading it.In my area the demand for SF rentals VS MF rentals seems to be disconnected, which follows the logic they discuss in the presentation.I'm surprised it has taken such a catastrophic meltdown for institutional investors to recognize the returns and low volatility in the RE arena.

But at some point in the next 5-6 years, all those "apartments" that have been hitting the market are going to get converted, and I'm betting we see some volatility in that market.

If the cap rate is comparatively lower, it indicates that more of a risk is involved.Factors That Can Be Used To Indicate More Risk Creditworthiness of the tenant• Location of the property• General volatility of the marketComputing Cash on Cash ReturnCash on cash return = annual cash flow before tax / total cash investedThis rate can be used in evaluating the cash flow from the income producing asset.

I wouldn't say that you have to look outside So Cal, but you may find investment properties in other markets that offer a return on your capital in line with your expectations (whatever your expectations are), while having a bit less potential volatility than our local market.