The pool will be added to by people who can qualify for a loan but for various reasons don't want to 'gamble' on homeownership.Demographics, location, employment opportunities and amenities will all play increasingly important roles to these people.It's an interesting new market for investors but with the same old caveat: that sucker better cash flow.

At the end of the day, it can still be a little bit of a gamble and unforeseen circumstances can arise.

@Brianne H.It is always a bit of a gamble working with someone new. 

You are no longer investing you are gambling that the rents appreciate or you can refinance the property into a positive CF position before you run out of money. 

:I doubt many have heard of this because it's fraudulent.

Your friend the seller's gamble is that he'll be able to sell the place for his asking price in As-Is condition.

It could appreciate but I consider that gambling.

Otherwise it seems more like gambling than investing and I am not a gambler.

The income route, to me, still gambles that the rent will increase as fast or faster than expenses. 

Like everyone mentioned, betting strictly on appreciation is a gamble.