A $350,000 home in Sand Diego or NYC would be more susceptible than a $200,000 home in Cleveland.

You have some solid goals laid out.1) As you've probably heard and seen through your research California is a tough place to cash flow in general and especially the coastal areas with housing prices,  your best bet would be multi family units with deferred maintenance or get creative with an SFR to make the numbers work in terms of cash flow.2). 

My experience from 2008-10 as a hard money lender was that loans where I was the only lender and had to foreclose did fine, although it was more work and time then I bargained for.The real problem loans I had tended to be the loans I was in on as a fractional interest, and it was like herding cats in dealing with fellow lenders, some of which just wanted to stick their head in the sand and not communicate.

@Sean Laney - I am a big advocate for HELOCS, especially when most peoples first lien positions are in the 2's and 3's.

Even the little coastal towns that were somewhat approachable for your dream retirement vacation home are so out of reach financially it just seems like it doesn't make financial sense. 

That way, the words "fee" and "deposit" are not in any way connected.CONTRACT TO HOLDProperty Address: __________________________________________________ City: ______________________, State _________Zip_____________This agreement is between_________________________________________, hereafter referred to as “Prospective Tenant(s),” and ____________________________, hereafter referred to as “Landlord.”Landlord acknowledges receipt of payment in the amount of $___________ from Prospective Tenant(s) as a non-refundable binder the property listed above.

Nice to see another O.C. neighbor.As you know, most of California, and especially the coastal areas are very expensive.

@Brad Sand reply was very good.

Or any suggestions where to shop for quality coastal furniture at a reasonable price?

Bottom line run your #'s and base the return on that.