If we reinvest that money into something more lucrative like investing back into more real estate projects as opposed to simply buying index funds, the numbers start to become astronomical.  

Generally speaking your interest rate will be higher with a HML as compared to traditional banks but not astronomically so.

For example, San Antonio or Phoenix have had astronomic rent growth(think 20% +) in last few years, but projected rent growth in 2022 is still in the double digits even with rate increases.

More natural disasters and higher replacement/reimbursement costs have driven premiums up, in some places astronomically.

Sure, 3-4% gains are normal in real estate to account for wage growth and normal inflation, but the run up in real estate values to these astronomical levels is not healthy.

I told her that she needs to clear this up in order for her to be able to rent again.One thing she told me, which I have never heard of, is that her landlord charged her several astronomical  water and sewer fees each moth after she moved out of the rental.Is this customary?

You don't have to complete with emotional families, with excess capital, who are willing to bid housing prices to astronomical levels.

Actually, if families already want a private school (and many do), it makes sense to live outside the 'good school' districts because the taxes in those zones are astronomical! 

I've actually done 3 lease option deals in that area: a condo, a home in chattaroy on acreage, and and a home in mead.My first impression is that the rent is astronomically high for the area.

In a buy and hold situation, the only times financing are bad are if interest rates are astronomical (like in the early 80's) or if the market is about to drop (and that's very difficult to predict).