Could even have negative inflation adjusted appreciationUnder $50k is typically much more difficult to find financing onYou likely will need to scale up to a large portfolio before you really start to make significant profits (in terms of $s rather than %s)Less liquidity, meaning it will take longer and be harder to rent, refinance, or sell if you ever need or choose to.So, depending on how you weigh the pros and cons will depend on if it is good strategy for you personally.

Glenn McCrorey where can I get more info on how to do this and find a caretaker that does all the work while I just do the maintenance etc etc. my take is I rent it out to the care taker for an inflated amount of what market rent would be in that area???

There a few areas of CT that have gotten quite inflated with values, with WH being one of them.

Not sure why investors want to pay off properties as fast as they can because unless you have crazy appreciation, the equity you have in the property is only growing at the pace of home price appreciation or generally inflation.

It will be hard to sell for a profit in the short term if you need to get out because you won't have much equity built in due to buying it for an inflated price.3.

I'm more curious why it hasn't resulted in more inflation and higher borrowing costs

They also "penalize" you by inflating your interest rate for a cash out refinance as well. 

After a few years, even properties that I purchased at below the 1% rule are now above it due to rent inflation.  1% Rule leads to the 50% rule:  I've noticed that if I stick to my 1% rule, I predictably land in the 50% to 60% net range (before personal income taxes).  

You are discovering the joys of buying a property whose value does not keep up with inflation, even as CapEx does.

I follow a few investors here on BP, and they are in the Washington market and seem to be able to find some pretty sweet deals (and note I live in Denver and I am from California, so I know high prices and markets which seem to be over inflated).