I have heard one in Santa Monica mentioned around the forums. 

This gets mentioned often... and while it isn't wrong per-say it's not entirely correct.

As mentioned before there are some pockets that are beautiful, or where neighbors care and connect but you can't invest from out of state. 

But I now plan to start here for sure and will be prepared to study up on each and every market component you mentioned. 

In terms of what @Ken Breeze mentioned, I'd advise you to determine for yourself, how active do you want to be in this investment?!

Not to mention the third.

Of course I kept all the material receipts and paid my father and the handymen but I did not hire a contractor so I do not have proper invoices but only receipts...I probably spent around 60 to 80k for the rehab but even if I could fully deduct the expenses the capital gain would be still very stiff...A friend suggested I should reinvest right away and do a 1013 exchange to defer capital gains and another friend mentioned to reinvest through RealWealth Network.

I have heard all positive things about the three companies you mentioned.

As everyone mentioned here, it happens a lot, recent house, old house, age does not mean a thing!

As many mentioned here, you will have difficulty coming back to the Bay Area market if your sold your only property.