In our opinion there are two insights that this information can provide, one being the desirability of a given market for larger investment firms and hedge funds as well the possibility of shrinking future profit margin in that market.

One of the problems with leverage is when the it hits the fan....it tends to happen all at once....borrowing goes in the toilet, your credit card limits shrink with no notice, you loose your job, your tenants loose their jobs, no one is moving because they don't have jobs or want to play safe, no one is buying because they can't get loans or loans are more restrictive.We just saw some of that with Covid, but we've seen it plenty of times before.One thing you can do to prepare if you decide to go full leverage route....is learn to be a good negotiator....Renegotiate your loans with your lenders, negotiate with your tenants to pay something...anything....and negotiate with everyone who owes you money to get something, and everyone you owe money, to take less.

They do however spend more at the hardware store trying to spruce up their place to try to get a decent tenant albeit at 80% - 85% of previous rents from all the competition.Now when you say these folks should just go out and get a job in this environment, I have a hard time seeing many local businesses eager to hire many folks as demand shrinks.

Love how folks are considerate like that.I had one project where I bought a 16 foot car hauler and some shrink wrap (about $2,300), and took the loads to the dump myself. 

You get to see when margins are shrinking with one strategy and when it's time to get out.

I would raise rents above market on the San Diego quad units as soon as rent control is announced realizing a shrinking supply will result in the units getting rented shortly if current tenants depart due to the increased rent.  

Shrinking markets involve falling prices.

however from what I know in Dallas and Houston rents have not risen to the same extent as purchase prices so yields are shrinking in todays market, if what your stating is true.I see this in other markets as well.. but investors still are interested because there is a good chance of appreciation that will make up for and in a lot of markets bring a better return than a non appreciating cash flow asset. it truly is a double edged sword and one has to make their own judgement of which way they want to go.  

It's a declining business, maybe 20% of the properties there used to be with the same number of companies, and shrinking fees.  

If all other variables remain equal (cost to purchase a property, tax, insurance, etc...) as interest rates continue to rise, profit margins for new purchases should continue to shrink.