Heart rate and blood pressure just spiked.

Rent and appreciation tend to rise over time so you'll be able to get out of the cashflow negative hole.I'd chalk this up as a good learning experience for not properly gauging market rents unless they did end up shifting since you purchased.

There are always people who do better and always people who do worse, so your only gauge should be against your personal goals.

His reasoning was that if you put the right amount of pressure on, you get some cash flow but you don't incur unnecessary expenses.

Wow why feel any pressure to go to work.

Ergo no upward pressure on values.As Anish note's there is no land to speak of to build on in the Bay Area.. 95% of the land that can developed has been developed so what you have now is a huge tear down and rebuild industry.. heck we were doing this in Palo Alto when I lived there in the mid to late 80s.I am currently in Singapore and if you think prices are high in CA... here a 900 to 1200 sq ft apartment in a condo tower will run you 1 to 2 million... and in the nicer buildings 2 to 4 million.. 

It is very high pressure and not everyone can do it.

And as they do, they put upward pressure on our housing market that was built for a much smaller population. 

There is no such thing as an American who cooks using a set of burners and conventional oven regularly and yet is wholly ignorant of the uses of toaster ovens, tabletop convection ovens, digital pressure cookers, slow cookers, hot plates, induction burners, etc.So everyone has to put their big boy pants on and agree to fix this together.

However since you do not provide any numbers on the rental market it is impossible to gauge.