What happens if values drop and it's necessary to move to cash or a different market segment? 

The reason i'm geo targeting all of California is because I want to focus strictly on homeowners in NOS stage, which is a small segment of the population.

The value improves so much more because while the house is appreciating, I am simultaneously gaining equity in the asset as it gets paid down.To highlight the importance of this even further, we can segment the value of the house into two camps: appreciation and debt paydown (equity improvement).

Luxury segment will depend on whether and when the stock market rebounds.  

The segment between US1 and 95 is quite nice and you should be able to get a pool or 4BR (or both) - that might be your winning location.Tchaka   

There will be a decent amount of losses in the STR segment.

Yeah, those producing, net-exporting, thriving while net-importers living off borrowed $ and time, heavily segmented between the haves and have not's, mass poverty.... 

Its one of the many ways to segment the risk profiles since the landlord on the lease is the mgt LLC. 

Instead, the most likely reason why Zillow is pulling back from robo-flipping is that the housing market is starting to crack and this particular segment is no longer profitable.

They are serving a segment of sellers.