There are some markets in CA that do cash flow, mostly the desert areas and areas like Bakersfield where you can buy properties for sub $100k and get over $1000 a month in rents but these areas will have lower appreciation potential too so it is almost always a trade off, more cash flow usually equates to less appreciation potential and vice versa.Rehab flips are better returns, but an active investment, not semi passive like rentals.

SO cal out in the High desert has a huge tax sale. there is a company in Redwood city that buys that stuff and sells to Chinese he is a Chinese guy as well cant remember the company name but I ran into them at a realty 411 event a few years ago.. they make the Aussie spruiekers looks like little kids.

Q: If you are stranded on a desert island with Adolph Hitler, Atilla the Hun, and a lawyer, and you have a gun with only two bullets, what do you do?

It was a week with no air conditioning in the hot desert. 

I have come across multiple "deals" via the MLS (targeting the Palm Desert and La Quinta cove areas).

I lived through that one.but like others said full scale desert storm .. don't think so.. 

Palms Springs is heavily regulated and typically at a higher price point than most other desert cities.

Off hand, I know that BofA, Wells, Midfirst, Arizona Bank & Trust, Desert Schools and Credit Union West offer HELOCS. 

Prices in LA are going to be high unless you live out in the High Desert or by San Bernardino.

As a Southern California native in the early 90's I would drive out to Vegas often for weekend getaways and I remember driving up 15 when the Hacienda was literally the only structure south of Tropicana down there all by itself, aside from a random motel/gas station, and that was the beginning of the wide open desert.