Finding anything in the SF Bay Area with a 10%+ cap is going to be nearly impossible unless it is fully vacant and in bad condition (i.e. smaller multifamily units). Also, keep in mind that the cap rate is just a "snap shot" of the property. For instance, there is a retail property suggesting a 10.5% cap rate. After applying the numbers the investor’s cash flow was about 1.5-2% before taxes! You will be able to find 10%+ cap rates anywhere; CA, Atlanta, Las Vegas, etc. Every market is going to have its positives and negatives. Personally, in state I recommend the Bay Area or San Diego. Out of state I would personally say Albuquerque, NM.
Jul 31, 2009