Deals not making sense right now

[Walt B Philip]

Hi all, first time poster. I’m planning on buying some rental properties sometime in the next year or so when I’m comfortable with my cash reserves.  Seems like house prices have jumped up a bit lately and I’m wondering if folks see prices continuing to have a medium term upside from current market prices or staying flat for some time while incomes/rents cratch up.  Long term they always go up but 1,3,5 years out, where do you see prices and rents?

I’m especially curious because a few rentals were picked up by investors in my area at well over 25% above last year’s comps and I can’t help but wonder if they’re gambling on near term rent increases....or if they’ve just overlevered their way into non performing assets because of fomo.  To me, low interest rates just say you’re on the hook for a bigger loan with no chance of ever refinancing, but that’s me.  What’s the rationale here though?  Is some profit better than no profit, or do you see rents jumping up more in the near term?

There’s a lot of other asset classes to keep me busy for now but I’m pulling the rigger on rentals when I find some number that line up sensibly.  So don’t get me wrong, I’m not one of these people whose investment thesis is “buy the crash”, there’s no way to know when they’ll come.  But I am curious why some investors are buying, from what I can see, such unprofitable deals.  They’re almost certainly at  heavy negative cash flow and it makes no sense to me.

For now I’m just going to keep learning what I can.  All opinions welcome, thanks in advance for your time