First investment property in LA. Am I crazy?

[Dan L.]

I've recently move to Los Angeles and I'm eager to learn about RE and to purchase an investment/rental property. Much to my chagrin, property is very expensive here. I wonder if some of you experts wouldn't mind answering a few questions that I have about the market:

1) Do the 50% and 2% rules even remotely apply? At the prices I'm seeing, I don't think that it's possible.

1b) If no, then how do you find a good investment? Even with 10% down and all the rent going to the mortgage, I would be losing thousands a month. 

2) I'm sure this is said often, "the prices are so high, can they possibly go any higher?" It is worth waiting and seeing if another housing bubble will pop? I can't imagine people saying these prices let alone higher ones.