Just my 3 cents worth adjusted for inflation.

Would they inflate the purchase price of the home so that the investor could collect the difference when the home is purchased?

I highly recommend checking out these areas if the inflated price point of the immediate Boston area is proving to be a barrier.

I am located in Raleigh, NC so the real estate market here is inflated heavily due to the volume of new movers (including myself).

Also, you want to believe that market will be able to generate and keep the spread between its current yield and inflation.  

I'd like to expand it a bit further and point out housing prices across the nation being high (see case shiller inflation adjusted home index and compare current level to historic norm).  

Prices are really inflated in Sioux Falls right now, but maybe that is the case everywhere.As far as your police officer buddy, not sure why he thinks it is so bad.

This way if they go out in year 3 I have extracted every penny out of the lease possible.Had I agreed to a 5 year with mom and pop and they went out in year 3 I never saw any income increase from them and the rent paid was being devalued each year to me with inflation ( example the same 100 paid was only worth 98 the following year ).   

from what I've heard CA. market is inflated.

Why is your broker sending you properties with inflated rental prices?