Thanks @Nate Reed for explaining.As a primary buy&hold investor, with passive income as the goal, I come from a different perspective:- The property appreciation is not something you can rely on, as nobody can predict the market fluctuations and time the market.

regardless of what was happening.. changed models yes but always doing something.  08 09 were bloody aweful though no getting around that we got our butts handed to us.. but no one is predicting another melt down anytime soon

There are some D-class areas where we can reasonably predict zero appreciation over the long term (but the cash flow is good!)

A possible magnitude 7 earthquake is being predicted within the next 7 days in Southern Cali.

I'm just looking for feedback on investors familiar with the area, what are your thoughts and predictions for this year? 

@Sam Valme Buying for appreciation is always harder to predict than buying for cashflow....however I do feel that if you have the right market knowledge, buying for appreciation is not the unicorn people think it is.I think that if we can predict the paths of gentrification, that will often given us a much clearer path to appreciation than other factors.

Obviously no one can predict rates in 5 years so assume that will be what it is, but is it still typically another 5 years until the next balloon payment or refinance and a 20 year amortization? 

The whole employment and credit profile is to predict whether they will be good tenants (pay on time, no problems etc)...

Saying it predicts profitability is like saying a $100 per sf property is more profitable than a $1,000 per sf property.Cap rates are not on leveraged properties.

And I like the idea of diversifying - technology changes significantly every 2 years, whereas real estate seems like a much more stable and predictable sector.Curious if any of you guys have any thoughts on this?