At the time I didn't really understand why, since you had to pass the income and credit checks regardless and there were only 2 companies that owned all the upscale places so not a huge supply.       

I have done wholesaling in the past (not in RE, but in reverse supply chain liquidation), and had to deal with a lot of unethical and dishonest sellers.

Lot of new-co that gets grabbed by investors which adds supply.

In terms of new construction, a couple things to be aware of in San Luis Obispo County are water shortage issues and development fees/taxes which can significantly increase the building costs.SLO city and the neighboring cities are particularly diligent on their water usage, as most of the county's water supply comes from three surface water reservoirs and a groundwater basin.

It seems that good, decent, qualified tenants have the pick of the litter, often flaky and uncommitted when there is so much supply out there. 

@Alan F.Every market will react differently depending on the the supply an demand and the economic drivers in that local economy.

Cape Coral also offers a great supply of homes that are not in flood zones and otherwise have low storm risk, particularly with some newer buildsIn terms of cash flow, single family in general is not going to be the best bet for optimizing that focus.

@Mike MostLook at the rental data and housing supply.

Las Vegas is on the verge of a market over-supply of housing, and that will produce a large price drop. 

I can see where a lot of supply would temporarily disappear if they rent instead of sell ... still a motivated seller, so those units are likely to hit the market in the future.