Every-time that you place a tenant you are taking a chance, gambling that they are level headed people. 

There is a group out there that track gambling, hookers, and booze sales.

I know the seller may think their 1 year lease option on their home will sell, but you don't know how qualified that buyer was, or how that deal was structured - and no matter how well you qualify (you can even make them sign a blood oath and give you their first born child as collateral), you're still looking at a 50-70% likelihood that the other buyer will actually buy their home - I don't like gambling on a 20-50% chance that I'll lose. 

Dipers.com CEO calculated the wholesale price of dipers from proctor and gamble + the shipping costs (Amazon free shipping) and determined that over the next quarter Amazon would lose $100MM on dipers alone.

You could buy in the path of progress, but you have to know where that is, and it's still a bit of a gamble that the particular street you buy on will have gentrified enough by the time you move here.  

If a property doesn't cash flow then really you're just gambling that it will go up.Here in KWC I focus on the $300-$500k price range because they're pretty homes and easy to sell.

The NOI leads to the cash-on-cash which become deposits to your account - - cap rates are like golf handicaps -- topic for discussion at the 19th hole (aka club house).Appreciation is totally uncontrollable, so I ignore it. 

What the underwriter is going to be thinking if the account she is looking at constantly dips below/above the cash to close + reserves number: "Oh, so he's gambling with his home buying money.

And the chances of that happening may be low, but you still have to be cognizant that it is a gamble.

Unless you were here in the crash, none of the cashflow numbers make sense, and buying for an appreciation play is a crapshoot - if you're going to gamble, roulette is a lot more fun.