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.   

This "price volatility" is a value investor's friend because it makes it easier to buy low and sell high.

I agree with others that secondary markets are going to have a lower bar for entry and less volatile ups and downs as the real estate market cycles.If you're going the Turnkey route, focus on the people first and market second.

I’m not saying you can’t locate deals like this, however, the volatility of income is higher than say the 1.25%.

We like both properties, the two combined fall in the correct price range, and we have financing for both properties.We need to do the exchange this Spring, because the condo we are exchanging is in a volatile market that I believe is at its peak.Both potential properties are owned free-and-clear.How can we do the exchange with both properties, but help the seller avoid paying taxes on two properties in the same tax year?

I would use age of the building as a main criteria to avoid D/C- product which will incur extremely high and volatile maintenance fees.

The interest rate is slightly higher but you build in future volatility protection.Building all in for a 10 cap is good if the right area.

That level of volatility is less likely here in St.

They will provide you with an indication of what they value in terms of yield, capital appreciation, holding period, volatility, etc.  

A good federal tax exempt fund with low expense ratio and low volatility we use to park funds prior to real estate purchases is FHIGX.