I've heard too many stories of investors purchasing homes for STR use, only to find that they lose their permit or the ability to transfer it when they sell.

.* Automate Follow-Ups to Stay Top-of-MindMost wholesalers lose deals because they don’t follow up consistently.

WE are seeing this in the Portland market.Montgomery Park the largest office complex in the state that sold about 7 years ago for 250 mil just got bought ( after no one bid it at foreclosure) for 25 mil by Menashe family. its over 1 million sq ft.. dont think you can lose on something like that. reminds me of the buys in 2010 in some markets were sfr's were selling for 1/4 of replacement costs..

You can not lose anything and no one can take from you.  

Most of these folks don't want to lose their voucher.Additional issue, when rent is too high, it slows down leasing. 

Who wins and who loses?

There is still a risk: You do not have the right outprice and lose money, your deal goes south due to unfound things when you bought it, then the rehab phase brings them up, and you spend more, and the market changes, which is something that can happen on a moment's notice.

@Bruce Woodruff points out you can lose all your money and more. 

I know a few pro football players that had short careers.

People like to use HELOCS especially now, if they have a very low interest rate first position mortgage, in order to tap into that equity without losing the low interest.