For my two-cents, the best investment opportunities in town are in central Los Angeles from Downtown through parts of Koreatown and Mid-Wilshire to the Baldwin Hills... and Long Beach. You can usually find a few multi-unit properties in these areas that operate in the black (especially in Long Beach,) and the metro/beach, long-term appreciation factor is first rate.
On the other hand, South Bay never seems to completely deliver on it's promise as a beachy alternative suitable for investment.
You also may consider Sameer's comment. I'm an agent in Nevada as well and the opportunities in Las Vegas right now are unbelievable, more than enough to help a lot of folks over come their apprehension of investing out of state. I understand that Austin and Tampa also fall into this category along with a lot of other towns. Unfortunately these severely undervalued properties' recoveries will be hindered by the low prices which make them so desirable in the first place.
If your pockets are a little deeper, think again about L.A. proper... or go a little farther south to Long Beach, breathe the ocean air and take a look around. You won't be disappointed. Best of Luck.
Daniel Del Real, CRS
PMZ Real Estate
Not sure if you want to stick with Southern California, but I can get you some deals up north in Solano County that can get you in the 16-18% ROIs. I just sold a $50K condo and it was currently rented for $1,200 a month, less the HOA fees, it was in the 19.3% CAP range. I also can get you some SFR deals we can rent out via section 8.
Let me know if i can help you. Just click on my profile for my contact info.
If you are looking for flips the highest ROI is getting REOs and short sales and getting them as soon as they hit the market.
Send me you info and I can put you on my hotsheet to find you a good flip.
The Carrabba Group
Keller Williams Hollywood Hills