We bought a 3-flat a year and a half ago, fixed it up, live in one unit and cash flow with two rented.

@Tyler Ansell  Hi Tyler, I closed on an FHA 3 flat earlier this year.  

Don't get weird floor plans (round houses, houses where you must walk through a bathroom to get to a bedroom, flat roof houses). 

My wife and I are house hacking our 2nd 3 flat over the last 15 months.  

Now there may be periods of flat rents so you would not be able to use it to predict annual cash flow but you CAN identify areas where the rent growth rate will result in more profit over time.

I cant comment on California and 1031, But can share with you that I also purchased a 4 unit block of flats back in 2012. after subdividing the units to separate titles and very good timing my 900k cost was now worth close to 2million.

@Jennifer Sleider   Hi Jennifer, my wife and I owner occupy a 3 flat and have another 3 flat that is solely a rental.  

We've been pre-approved for a traditional mortgage that would cover the purchase of the property, but when I asked our lender about a construction loan we were told that if the property needs rehab to be livable (it does) there's no separate loan for this, and that what we would need is a different kind of loan altogether (203k) that would cover both the purchase and the rehab.

We do, however, offer a flat-fee listing service through New Western Realty (another sister company).

I know where I was I was watching the world series between Oakland and SF in my office in San Mateo when all of a sudden my puter monitor flew off my desk and we had a very big shake.. couple that with the war and by 1990 many parts of the bay area even such hallowed ground as SF  Los Altos hills etc etc saw price drops in the 30 to 50% range.. and it stayed flat like that until about 97 to 98 then made new highs in 2000 prior to the dot com bubble .... so it was about 10 years to recoup... equities and stabilize a region.. so your thought process is not that wild of thinking... and its not that is a low probability its a certainty that there will be a quake in socal and SF Bay area no doubt about that.. just don't know when.. they seem to be spaced out in N cal about 80 years.. so looking at 2060 is for the next big loma Prieta type event..