He is extremely knowledgeable and has been in the 1031 business for 10+ years.

Yep, hands on local like you are doing is the way to go IMO ... if you are willing and able, have the funds, and have the discipline to NOT pull the trigger on anything that isn't a great deal.

While you might not cashflow on it right away, it can be a better way to grow wealth given the opportunity to leverage a higher amount of the purchase price since you'd be an owner occupant, and Los Angeles is (in my extremely humble opinion) more likely to experience appreciation in the long run than a cheaper market, therefore generating more wealth to continue investing with.

We only use CAP Rates when we are comparing one opportunity against another before pulling the trigger. 

I personally would rather have my house they can for several months instead of having it trash.On the flip side tenants that have been there extremely long he sends mother today's gifts along with vacations.

How did you get over that and pull the trigger - or know that it's best to walk away?

Stocks are pretty liquid, BUT selling them triggers tax consequences and the timing of when you want the money for real estate purposes might not coincide with the best time to sell the stock.

I'm extremely happy to say that all of my properties are right here in San Jose.

Verifying last 2 years of rental history and income extremely important to find the “best of the worst”.Make sure you understand the Class of properties you are looking at and the corresponding results to expect.

Here are some of the types of “wanna be” investors who never seem to be able to “pull the trigger:”The Organizer – This individual can’t seem to ever get fully organized - and until they do they can’t possibly make a purchase transaction.