Kinda dicey.My friend's reasoning: I will have a greater equity gain on a house and perhaps a better income (again, renting out my current house instead of the condo).Then there's the other thought of selling the condo now and putting the equity into a cd, gambling that the market will flatten or dip, and buying low.

Never been and I can't gamble yet!

On the other hand, I also am not thrilled about negotiating a short with the lender, possibly doing a title search and then finding out after that the seller has no interest in working with me.

They were all thrilled that even 100% financing could yield positive cash flows here--since I have only invested here with positive cash flows I decided to see how investors investing for appreciation thought!

So basically if I can invest in LA, I would have but at this moment there is just no way I am going to take on such a big gamble on a slowing market.

Assuming a mosdest gain of 5% appreciation a year after 5 years the home is worth $638,000 and you still owe $500,000.Always remeber that with a Intrest Only loan you are gambling on your home appriciating.

The ARM is going to start adjusting, but if you want to gamble and think rates will go down by when the rate starts to re-adjust, an ARM may be for you.

If it's a land locked lot, meaning there is no access to it except through someone elses land, it could be quite a gamble and may pay off big time.

My bidding is then 12-15% (net to HUD) below the HUD listing price.My motto is bid low and be thrilled if you win--remember there's something new next week if you don't.

But anyone who thinks that appreciation is going to bail them out of a low or negative cashflow situation is gambling, pure and simple.