They basically learned all their systems, fundamentals, and etc then went off on their own.

They have fundamentals to justify the valuations although they are getting stretched a bit.

This isn't like putting a man on the moon, this is a fundamental skill.

@Prameela Alla, welcome to BiggerPockets and congratulations on starting with the fundamentals of deal analysis!

This is not a fear based trend or even market fundamental down turn.

The pricing typically has almost no correlation to the underlying asset fundamentals. 

Start early and focus on the fundamentals!

While it's generally one step up the capital structure from rents and mortgage payments, they aren't seeing mass non-performance either:This top-line performance is supported by strong fundamentals, with a number of our stabilized properties actually experiencing positive rent growth in spite of the larger economic contraction.We attribute this success primarily to having maintained a disciplined value investment approach, led by our most active strategy of owning and lending to affordable apartment communities in growing cities throughout the Sunbelt.

Lets dive into a few of the take-aways from our PVRP_RESIDENTIAL: Residential 1: $350,000 single family home with no debtMarket rents for properties like this are around $1800Operating expenses are relatively low, tenants pay utilities and i’ve a assume a owner/manager situation for all three scenariosNo debt, means no principle pay down, higher cashflow in dollars, lower After-tax cashflow return due to taxesProjected year 1 returns would be as follows for this illustration:Pre-tax Cashflow $13,070 (3.73%), Pre-tax + Pay Down $13,070 (3.74%), After-tax + Pay Down $12,749 (3.64%) and Total Return $22,551 (6.44%)Residential 2: $350,000 single family home with low leverage (50% Loan-to-value)Leave market rent and operating expense variables the same to maintain a like-kind analysisYou could theoretically buy two of these, so for illustration purposes multiply each return metric by 2Projected year 1 returns would be as follows:Pre-tax Cashflow $3,640 (2.08%), Pre-tax + Pay Down $6,999 (4.00%), After-tax + Pay Down $7,224 (4.13%) and Total Return $17,026 (9.73%)Residential 3: $350,000 single family home with moderate leverage (70% Loan-to-value)Again rent and expenses are fixedYou could theoretically buy 3 of these with your available capitalProjected year 1 returns would be as follows: Pre-tax cashflow -$132 (-0.13%), Pre-tax Cashflow + Pay Down $4,570 (4.35%), After-tax + Pay Down $5,014 (4.77%) and Total Return $14,816 (14.11%)The take away here are the fundamentals of leverage.Sheet 2, named PVRP_MULTIFAMILY will outline some current on-market opportunities.

When I have been in this situation as a seller or listing agent I have met it with a "umm . . . hard pass" each time because it fundamentally changes the terms of the offer.