The closest market that seems more affordable is Riverside/San Bernardino. 

@Jonathan YehOption 3 is the closest I would do.

The closest I've gotten is a really ugly auction buy, which I just sold recently.

If I ever had $5000 or $10,000 a month like some of you guys, I’d consider myself rich as heck and I’d lift my closest most loyal people around me up out of there holes.

Education and networking are what i consider to be the 2 most valuable actions you can take, and BP returns these in excess.Some of my now closest friends are people i met on BP.

Riverside is the closest RE market that you'll get to OC that you can afford, and that's an hour drive on the 91 going WITH traffic.FHA loans have yet to pencil out for me to make a profit, at least initially.

I have heard of the carp issue, but I still noticed the lake being frequented quite often as well as the one vacation rental that is closest to me.

Closest OOS for IE guy is Vegas, which has better initial CF but that might have little to do with total profits in the bigger pockets scheme of things. 

I'm planning to invest in either the Madison area or Milwaukee area seeing as they are the closest large metropolitan areas, I've also wondered if looking at growing towns/cities would be a good idea i.e.

This area doesn't support the size of the property, therefor, you're lumped in with the properties closest top it...which are in the +/-2600 SF range...renting at $1750.This is a very common problem, due to a lack of understanding of how to do Market Analysis.