These properties should trade at high cap rates (10%+) due to the volatility and risk.

I personally prefer the OK market because they are smaller and seem to be less volatile in comparison to places like AZ, NV, and CA.

For example, the stock market is significantly more volatile than real estate.

In addition, West Oakland has some of the more volatile prices in the SF Bay Area, which is why I bought a duplex up by Andrew's place in 2014 for $300K.

On top of that, you're in a City that sees tremendous growth, but that also sees tremendous price drops when the market corrects.Our market volatility, increases in materials and labor, etc. definitely fuels uncertainty, even moreso with a long-term project like this one.

In the meantime, I don't like the volatility in the market but I want a decent return in the short term (who doesn't right?).

All revenues would be dedicated to the investment until we sell the property.Here is the comparative analysis that I am seeing after doing my research: Principle & Interest (5yr 20) Interest Only Depreciation Expensed Yes Yes Pay-Down of Note Yes No Interest Rate Volatility Lower Risk Higher Risk (Depends on terms?)

I would say this phenomenon is the same as when the stock index crashed, major expensive stocks like Facebook and google crashed as well ;-) but cheaper stock that's not too correlated to the main market, has much lower volatility. 

If the cash is used for a long term buy and hold it would definitely be better in not all but most cases to use fixed 30 year financing so you can control your "downside," cash flow risk and only focus on the upside which eliminates near 50% of the risk scenario.Heloc's might be a bit lower than a 30 year fixed if the LTV is less than 80 % of your property's market value, but the benefit of the fixed terms far outweighs the volatility and lower variable rate of the HELOC.HELOC can be great if you're doing flips since the capital can be replenished quickly as you can churn your capital in and out multiple times a year and the interest rate risk of a HELOC is not nearly as high when used in this manner.

I have approximately 22k in the bank and 45k in the stock market in highly volatile stocks.