Fabricio KannenbergI am a believer that you pick where you want to live and then figure out how to play the real estate market where you live. 

This is very common in California, as you are experiencing.Consider this:(Annual Cash Flow + Annual Appreciation) / Total Investment = ROIIf you bought the house (simple numbers) at $500,000.

You could probably pick up a dump for 25k cash or so and dump a bunch of sweat equity and long nights into it and make some good money or have your first rental.

If you pick a market that does not have any hope for an increase in population then you are limiting your market for potential renters.

Pick up Dave Ramsey's book "The Total Money Makeover".

If you're talking owner occupied, meaning you're going to live there, it seems like choosing between those two areas is the primary consideration, then once you've picked that market you can dive down to consider specific properties.For your own personal residence, usually other life factors such as proximity to your place of employment and family considerations (spouse/partner, children, parents/extended family) are even more important than real estate investment.

Please click on the links, give them a read, and share your thoughts in the comments.First is a post that I feel will help not get overwhelmed with the amount of info that is here on BP:https://www.biggerpockets.com/blogs/5868/52761-the-simple-guide-to-getting-started-on-bpThe second is a post that will help get you focused with your real estate investing goals:https://www.biggerpockets.com/blogs/5868/52743-im-new-to-bp-any-advice-would-be-appriciatedThe last one is a post that will help you choose an “investor friendly” real estate agent.

The newspaper does also let us put a free announcement about our meetings..Simple as that.

Please click on the links, give them a read, and share your thoughts in the comments.First is a post that I feel will help not get overwhelmed with the amount of info that is here on BP:https://www.biggerpockets.com/blogs/5868/52761-the-simple-guide-to-getting-started-on-bpThe second is a post that will help get you focused with your real estate investing goals:https://www.biggerpockets.com/blogs/5868/52743-im-new-to-bp-any-advice-would-be-appriciatedThe last one is a post that will help you choose an “investor friendly” real estate agent.

A couple of "simple" ways to help mitigate this problem is to make sure that you 1) find and buy a deal well below actual market value and 2) have ample cash reserves.