Regardless, you took a gamble and it didn't work out.

It's still is a gamble.

It looks like you're now aware you need to go back to the drawing board, so that's good].As for your assessment on the area's potential (vs negative economic possibilities), at the end of the day, you'll have to make your own investing/gambling decisions.

Or throw the dice and gamble the investment will come up roses and pay off the debt.

It's too much like gambling.  

It's really hard seeing how well people are doing with cashflow properties :(Other assumptions:- I have the funds to buy here in the Bay, although I don't want to gamble on further appreciation, I really like the idea of cash flow- Other than building wealth, another main goal of buying an out of state property would indeed be diversification from the stock market, which is wise in my opinion considering the crazy run of the past 7 years- I am aware there are other passive options such as investing in debt deals via crowdfunded portals, but those to me just seem a meat marketplace, plus you don't recoup any of the advantages that come with leverage, tax efficiency and building equityThanks

Paying market value hoping for appreciation is gambling.

There are plenty out there that claim that cash flow is the only possible way to make money in this business, and that all others are gambling ... you will hear it all over BP, and frankly I find it to be a ridiculous statement based on the last 15 years of investing in a desirable (but expensive) market ... that is through one of the worst housing recessions since the great depression, BTW.

That's not to say money can't be made in that market but it's more similar to gambling than investing imo.

. - In my opinion, speculating on the market is a gamble.