He has to hire out causing price fluctuations.

... and how increase in demand remains relatively constant even while borrower eligibility factors fluctuate, often wildly?

The # of stories, age, construction & sq/ft makes a huge difference.  40 efficiencies could be under 20,000 sq/ft, but 40 2br could be over 40,000 sq/ft, driving more value to insure.We have worked on 5-6 similar sized properties this past month all in different markets, and the pricing fluctuates by 200% between the different markets.  

The utility of this rule fluctuates with numerous factors such as HOA fees, high property taxes etc. 

Seasoned ones typically choose wholesaling as their business model, because they can net 10k-30k or more per deal, in less than a month, and they aren't exposed to the market fluctuations or risks. that's a WIN for any business. 

@Wes Singleton - that is a good point, however on the development side of things you're looking at highly fluctuating (increasing) material costs as well as challenges on timing due to labor shortages. 

Cons: interest payments on amount used, market fluctuations (if things go south), losing slight bit of leverage, not quite as liquid (but easy availability right now)

@Hayden Wright I look at the cost of taxes because they fluctuate wildly in my area potentially by as much as $5,000 on two otherwise equally valued $200,000 properties which can eat up your cash flow immediately.

Life happens and things take longer than expected, rates fluctuate, bank become more conservative, so it is good to be covered for a little longer.With prepayment penalties you have to do the math and make sure you can live with the penalty in various scenarios.

Still seems extremely high for the property values and like it fluctuates often and between neighborhoods.