In theory I can buy a $1m property, but I've never seen one that pencils out with any decent cash flow. 

Trying to rent out a $1.4 million house is unlikely to cash flow positive as a long term rental - a lot of people in CA are doing mid-term or short-term rentals. 

It's true that our market has become more and more difficult to gain cash flow but not impossible and many strategies to consider.  

And rental income of $1,000 (negative cash flow on rent vs loan PMT and property tax, property mgt cost, etc) a month on the same property. 

This particular host on the podcast said that, usually within 45 days, he's already cash-flowing from STR and is finding a mortgage company to pay the seller in full. 

I'm sure you know it's a very seasonal area but if you're willing to do extended monthly stays during the off season that may help you cash flow better.

It seems this market is ideal for cash flow, as rents seem to easily cover mortgage, taxes, and more with plenty left over for profit.

(I'm able to get into this thing for only 10K the cash on cash return is absurd from 37-56% (depending on closing paid and points I pay, its an 8% Cap, 350-450 cash flow (after variable expenses + depending on final rate) Brand new.. seems like a decent first step but the functionality..

Two I could rent out for 600 each per month and one I could get 700.Another option would be to rent the house out to a family through a property management company and just let it cash flow. 

I think it is a rare consideration for most renters if they move into a rental neighborhood or not.