His are extreme examples but yours is too. 

My background:I became a professional musician at 18 years old and spend the next 6 years touring and making music for Tooth and Nail/EMI Records. 

Yes Bear has the skiing, but also too the snow has been horrible here the last couple years and a lot of times the people attracted to the slopes are the (young and dumb?

I have 14 going vertical right now. so for 400k or less in capital I have chance to make 600 to 700k for the year off of these deals. and I did not have to fight tooth and nail for a rehabber.. those are the numbers a builder uses see if it will work for you in your market.

Realtor then goes into contract with buyer subject too the property closing and divulges he license status to the buyer. 

It's another issue here too, the seller knows the price is not worth what he has it at, otherwise he would take a buyer that requires financing.

Tons of great Bay Area investors on the site, and some great meetups too.

I would not give the deposit too the seller, I would give it to the title company. 

I do too ...The point is, the numbers work, or they don't.  

Another aspect investors need to be aware of......anticipating again, is when an owner has a buyer and folks call us to put a deal together, if you're not a Realtor you can be on thin ice as you have no interest directly in the transaction, there are other issues too, the unauthorized practice of law is a favorite for prosecutors.