Maybe returns are better in Tampa, but if you live in Bay area and drive by it every day, there is some comfort in buying in the backyard, even if that is not always the best financial decision.I would guess, but it is purely a guess...that 90% of the real single family investors that own 1-2 properties, own them in their backyard...same town/same state.At $816,666 a unit.....they need $8000/month in rent or so, right? 

Currently living on the main floor with two roommate renters and will be renting out the basement unit, which opens out to the backyard.

Those towns, along with good access into Manhattan, always seem to have a pool of potential renters provided the timing is right. 

The market is hot because it's a perfect combination of: 1) Low inventory on the market (large buyer pool competing for fewer houses)2) Very high buyer demand (everyone wants to buy, and there are a lot of people relocating to AZ)3) Interest rates are low, which further fuels #2 above 4) Tempe has always been a popular place to live and it's landlocked so it's not like buyers can go further out to the new developments of Tempe (there aren't any)

Monthly condo fee is $340 (for pool, etc)  so that gives an idea of the type of property/investment.I have to do something with the kitchen cabinets/countertop.   

The house, and especially the pool and teak pool house, gives sunbathers a jetliner view of L.A.

.#4 Large Pool of Prospective Tenants: Section 8 gives you a large pool of prospective tenants (about 2 million in the U.S.), as a result of the government subsidizing rent payments.

Does it just lower the pool of applicants you have to choose from?

Now it is true that other markets are less expensive than Tampa, Miami or any other part of Florida but doing your first flip in your own backyard give you more insights of what to expect from a flip.  

I love meeting people in my backyard but am also interested in Quad Cities (Moline, Rock Island, Bettendorf, Davenport).