Does anyone know any hot areas in these cities that will produce cap rates of 10% or more?

That depends on how hot the market is.

Current value 180k-200k , say the market dips 10-15% it would only drop to 153k-170k), I could be underwater at those numbers, but if the tenant is paying the mortgage in a hot rental market( low vacancy rates ) what would be the worst that could happen, I don’t mind taking the interest rate hit if that means I’d be able use the cash to put down on next primary and if my current property still cash flowed 300$+ a month 

Finding the motivated seller in todays hot markets is the problem.  

SLO is great but is already a pretty hot market so maybe look at Ventura, Pismo Beach, Morro Bay. 

You'll likely need this, depending on how experienced the agent is and how hot the market. 

Not that I know Dayton, but I just looked it up: it's quite a hot market with list to sale ratio at 100%.

I find the median to be a better metric than the average, since some of these indicators swing wildly depending on the time of the market.SummaryWe started the year hot, but due to the impacts of the virus, we cooled at the very end of the quarter.

and this market while not red hot multiple offer type market its quite consistent .. so the risk/reward on this was I risked the 125k BEFORE we were annexed and certainly before approvals..

There are some “hot” areas (as my contractor calls if for trouble areas- drugs mostly).