As rain fell, authorities patrolled through flood-prone working class neighborhoods urging residents to move to shelters.
The hurricane was centered about 20 miles (35 kilometers) east-northeast of Cabo San Lucas late Thursday night with maximum sustained winds of 100 mph (155 kph). It was advancing to the north-northwest at 12 mph (19 kph).
The Hurricane Center said Olaf could strengthen more before reaching the coast.
Hurricane-force winds extended as far as 35 miles (55 kilometers) from the center and tropical storm-force winds as far as 105 miles (165 kilometers).
The hurricane was expected to bring 5 to 10 inches (12.7 to 25.4 centimeters) of rain to the southern part of the peninsula, with up to 15 inches (38 centimeters) in isolated spots, creating the danger of flash floods and mudslides.