Right now, the government is trying hard to generate 2% inflation.

Dealing in notes as also best locally, you can manage the collateral aspects.Not sure of your training, you might be an expert dealer, could be, but then if that's the case you'll know that those SF notes were probably made with inflated sale prices.

@Robert McNamara for someone in SJC area you can certainly understand the position I am in with this inflated markets.

Zillow was the only one which has a value and it is WAY over inflated.

Right now, living in the Bay Area, it seems unrealistic to purchase an owner-occupied cash flow property given the inflated market here (does anyone disagree with that?). 

Or do you think you'll get more than trivial (rate of inflation) appreciation in that area and for that property?

I'm personally betting on a huge upswing in inflation / interest rates in the next few years, which reduces the amount of house you can cary with a loan.

Inflation - or not - maybe just greed!

But these markets are more of in an equilibrium so no big opportunity as it was US in 2012 and 2013.London is completely inflated in residential commercial is much cheaper.Other European countries could be a great opportunity particularly Greece and Portugal but they have not hit bottom yet, rental returns are low despite a 40-50% decline in prices and I don't see prospects for a fast recovery yet.  

Your inflation hedge is somehow better also as rentals are somehow correlated to inflation and since your mortgage payment does not change (use only fixed rate non recourse, I personally prefer 30yr fixed loans) this results that the weight of interest payments over time tend to be minimized as rents increase but payment remains constant.