This is all indications of a super sensitive earnings, extremely sticky projected inflation, and the bond market being way in front of the Fed. 

For instance, someone making $500k a year and living in a very highly appreciating market might be extremely happy on a deal that loses $200 a month but is getting 5% appreciation on a 2 million dollar property in San Diego, butut that doesn't make sense for the investor with 30k and a lower paying job.When it comes to the book series I agree with you that the order doesn't make sense (having read both).

Investors should therefore exercise significant care when choosing their Qualified Intermediary because of the critical role the company will play in the administration of their 1031 Exchange transaction.It is extremely important to note that 1031 Exchange Qualified Intermediaries are generally not required to be licensed, regulated, audited or otherwise monitored by any regulatory body.

Sure you could do a money market or put it in an ETF or something, but this is one of the options where the balance "can't" go down or is extremely low risk while making a decent yield.

Rental property is extremely tax advantaged based on the current tax code.

Or would the investors above been aware of the extremely high risk associated with these extreme high returns?    

For me it's CA since I live here but the prices are extremely high for a new investor.

.: EM doesn’t seem extremely low, just kinda low.

They sold two appreciated duplexes in Dallas and we turned them into 8 units in Mesa, AZ with higher cash-flow, and much closer proximity to Southern California.I'll add to your Phoenix "pros" list:1) Landlord friendly rental rules2) Easy evictions in < 30 days3) Rents are rising faster (on a % basis) than many other metro areas4) Low property taxes (and the property taxes don't sky rocket after a purchase as they do in CA)5) Very low vacancy and extremely high tenant demand.

Especially the cold weather markets.