Make sure there is adequate coverage for loss of rents. 

This does not have to be liquid(checking or savings account) so you can use your IRA account, 401K and even money market accounts as proof of adequate reserve funds.

Hope this is helpful and answers your question adequately!

If you're close to the beach, there's a large chance a natural disaster (i.e. hurricane, flood, etc) could do serious damage to the home unless you have adequate insurance coverage which may be costly in that area. 

@Laurie PalagyiStart with getting adequate knowledge of real estate and strategies you are planning to apply in investing, then select a niche.Also explore various financing and partnering options and do a thorough local market research and analysis.You can start by joining local real estate clubs, attending meetups and connecting with local agents and investors.A local Investor-Agent can help shorten your learning curve and save you a lot of headaches as they tend to understand the market better, they also have a team of real estate professionals like Contractors, Appraisers, lenders, Property managers etc. to execute the strategy more efficiently.All the best!

If you want to stay in the Bay Area, your down payment needs to be 50% or greater in order to bring in an adequate size of cash flow. 

If your retirement utterly depends on having adequate cash flow from your properties, any downturns will cripple you.

Adam Bradley I'm assuming you've looked at zoning, that permits have been pulled, that there adequate parking, etc.

If the numbers make sense, and you account for a bad "what if scenerio" and have adequate reserves on hand you will be fine.

Don't get too wrapped up in all the formulas and 'have-tos'You just need to know that your 'return on investment' is adequate.