Bear markets are an excellent opportunity to invest and buy stocks and real estate at a huge discount.

This requires buying at  severe discount.

She noted that the houses that straddled the fault lines were always for sale and at a discount compared to others in the area.  

You don't want a lot of properties with negative cash flows.I would also suggest looking to purchase properties at a discount to their appraised value either by purchasing them direct from homeowners in preforeclosure or finding REO properties.

I bought a home in The Colony at a large discount for $102k and rent for $1300 (rents are $1500-$1700 in neighborhood and I'm selling to tenants this month for $170k) and just sold one in Arlington for $107k and rents were $1200-$1300.

Don't discount those folks who haven't ever done a deal.

I authored an article about this recently, and the relevant paragraphs are here:"The IRR is, simply put, the discount rate (expressed as a percentage) at which the net present value of an investment becomes zero.

You even get issues like investor buys materials to control costs, but in reality many contractors can get materials at discounted rates, and yes then mark them up a little.

You'll somehow have to succeed in talking the seller/agent into a VERY large discount in order to create room for your own cut in the deal. 

California is a tenant friendly state, so maybe there will be some distressed Sellers who would rather allow you to handle the eviction and sell you their house at a discount because you can take care of this?