But, they didn't take advantage of this and they weren't just going gambling and then not paying their rent :-)

You are gambling with having to pay double damages.

You are taking a gamble on what path their life takes in the future knowing the likely out come if it goes bad.

It's a gamble IMO and goes against the notion that you should make your money in real estate when you buy. 

I prefer SFRs with no HOA too ... higher buy in cost, but generally better appreciation & tenant class, more control, more "value add" possibilities (try doing an addition on a condo :)), and no unpredictable HOA fees or assessments to eat into my cash flow.So, though some think that all that buy RE in CA for appreciation are crazy gamblers, and many in fact are, I myself am incredibly conservative, because of my multiple exit strategies believe that what I am doing is NOT gambling, and have the consistent long term track record of profits (in BOTH appreciation AND long term cash flow) to back it up.

Some people are more into gambling than others, that's all.

Come on, you're smarter than this.This person might be a great person to have play dates with kids - but still be a terrible gamble as far as a tenant in your investment property.  

But it's okay, because if his gambling winnings aren't sufficient to pay the rent his family will give him money. 

If I lived in another part of the country and I did the same thing started as an agent at 18 and a broker at 20 and the play was to stack cash flow rentals because appreciation is gambling etc.. that's what I probably would have done and would done.Keep in mind in the 50 60 70s and into the 80s people got started in real estate buying cheap land all over the country as an investmentit was not until about 2001 2002 that smart folks said hey CA real estate is sky hi lets start selling mid west rentals to CA people and other high priced markets.. that's how the turnkey industry or OOS investing industry started..

That's a lot of gambling if you ask me.Then lets think about their case.