However if you have enough income from you job and are looking for longer term appreciation and mortgage pay down it is a legitimate strategy.

I am with @Russell Brazil and @Wayne Brooks  near new house in what is probably an A area for 10% down 0 interest is a smoking deal.. even if it breaks even or you feed it a tad IF and its a big IF it can be sold retail in 5 to 7 years for that 240k mark.. its a very nice deal.Plus the tenants if you pick right are probably going to be simple to manage not like what you get when you go for lower end CASH flow rentals... like everyone above is talking about.Unless you have a legitimate way to scale in the rental business.. owning a few homes and choosing on whether they cash flow 50 to 100 a month more than an other but going down in asset class is foolish.buying this Nice property with 0 interest is as the other very experienced folks that chimed in is a home run...

I typically have a conversation with the buyer's agent at the preapproval stage where I explain to them that to make this deal work, they are going to have one week (deadline varies with normal closing time in your area, so maybe 3 weeks is reasonable in Indiana) from when we go into contract to find a tenant, get a lease signed specifying $X,000/mo in rent, security deposit made, with a move in date specified on the lease to be 2-4 weeks after our scheduled close of escrow, and the understanding that they can market the rental property to deliver this, in that timeframe, is the only way their buyer is getting legitimately preapproved for a $X50,000 purchase.

They may be having legitimate financial trouble.  

Seems like my observations from the original post that this is a legitimate strategy are correct.

Could be for a legitimate reason or some perceived solution to a problem.

@Benjamin Vail@Kevin LefeuvreThe interpretation that the story gives a bad rap to the "Normal" AirBnB host is not legitimate, in my opinion.If the majority of people reading the story already have a bias, either for or against the host who used the platform illegally, they will continue their bias.

What I can't figure out is why everyone is so quick to get sucked into working with people they don't know or have never met when there are plenty of legitimate private and hard money lenders in your own back yard.

Many people have rented rooms forever, so I guess the only difference now it is legitimizing the practice/income etc? 

At the end of summer 2014 you'll be past your 1 year and can legitimately get another OO loan, so I don't know why you would refi into a higher rate investor loan.