Speculators use them.  

Banks have been unwilling extend credit on speculative investments such as flips.

@Deurward Clark  very simply... all of any of this is speculation and just guessing.. 

San Diego is an amazing place to live.That being said, it's a pretty terrible place to invest in buy and hold single family if you're looking for cashflow.The people who do buy and hold SFRs in San Diego fall under a few categories in my book:- People who bought back long ago or during the crisis and are able to maintain good rental cashflow- People who are speculating on appreciation and can afford to eat the risk and negative cashflow- People who can't do math

It is speculated that writing was born from the action of lending but I will leave that for the scholars.  

George we have all the makings for this to collapse once again and it will take with it the levered investor who speculated on flips and even buy and hold.

Speculating, not investing, IMO.If your goal is playing it safe, as you say, I'd recommend targeting a more stable market.  

I usually go after a sure thing rather than speculative appreciation but I understand the other strategy.  

This whole deal is speculative. 

I live in Brookhaven and the #s that I have seen don't work for my risk/reward appetite.Its more for speculative investors who are banking on further appreciation which isn't my style or recommendation.