The cash flow is appealing and I have a high tolerance for pain but it's just easier to save up and invest in a market I know well, can manage myself, and the whole provide me with strong appreciation..

Being local to SoCal might tip the scales ever so slightly that way, but I think your investing profile (how much risk tolerance and how much time you have) will matter more for this decision.

Is it good enough that you will be able to tolerate vacation renters above you with your new baby? 

I saw earlier posts about the new law, SB 978, investor suitability requirements for trust deed investments.California now requires that when selling or brokering all of, or an interest in trust deed investments, hard money lenders and other providers have to:1) obtain information about the investor, some of which was not necessarily required under previous law, including, but not limited to* net worth* other investments* education or investment experience / level of sophistication* career history* age* income* tolerance for riskThere is a new form from the California Department of Real Estate that can be used to gather some of the information.The form, although it asks questions some of my investors are not exactly thrilled to answer, is not all that bad.2) The big part is that we now have to "consider the investor's circumstance and whether or not the investment is suitable for them."

mapOSM[zl]=11&mapOSM[c1]=41.457136982923494&mapOSM[c2]=-81.70051574707031&mapOSM[s]=17&mapOSM[fs]=falseMuch confusion abounds because the west part of the City of Cleveland is "sometimes tolerable" while the east part is "all-around really bad."

Like @Jake Fugman said, it depends on your tolerance for risk.

I'm not a big believer in the word "NEVER", as I look to see what it takes to make it work, but I also have a high risk tolerance.

Therefore, take a moment to think and to answer that question for yourself - What is the rate of return do you want to earn on your investment, and what is your risk tolerance?

@Ralph Christian Mark Aquino  As others mentioned, depends a lot of your risk tolerance and goals. 

It all depends on your risk tolerance and comfort with leverage, but I think that what you are thinking is a killer strategy that more people should take advantage of.