Most often it's in free & clear properties but, in a high enough desire area like these, and with low enough mortgage balance, yup, some can 100% get enough on the sale to have it all make sense because as @Jay Hinrichs has pointed out that in these areas the majority value is in the land not the structures on the land. 

For $1,500 renters in Cincy would expend very nice place on a quiet street and desirable area.  

I've flown down and walked the units at Western Way and there is a lot to be desired.

Phase I of the development was in the more desirable city + Zip. 

The new design takes the home from a 3 bed, 2 bath to a 4 bed, 3 bath, 2,400 sq ft rambler on a large lot in highly desired area.

We are looking to buy a condo in Chicago as the new rental, for a variety of reasons, but most importantly because it would rent better in the city, and it fits our desired price point (so we can allow for the rest of $$ from the sale for paying off their Oregon home and pay all, or some of the taxes on the boot). 

@James Wise gonna have to disagree with the "lie cheat steal" concept regarding residents.Any resident has the potential to be less than desirable.

Repeat as desired.

Owner occ developments there is no value associated to the income approach so these props generally speaking will appreciate a lot more as the neighborhoods are much more desirable. builders the last thing they want to do is sell to investors if they are creating owner occupied communities.. rentals degrade the neighborhood and they will be sabotaging their own values to allow a bunch of investors to buy and rent out in their communities.So when you buy new builds keep in mind if its a build to rent community they will NOT appreciate like owner occupied neighborhoods.. might be best to find something already 3 to 5 years old where the stigma of renters dies down.. that would be best to protect your investment.

Which is why I pay more, for less cash flow in highly desirable areas.In high income areas, rent is a lower proportion of income so therefore your tenants have a higher capacity for paying higher rent because rent is less than 20% or even 10% of their income.