I think many of these now overextended young people with apparently limited career prospects who became no-money-down buyers of multiple properties were doing a very smart thing. Dumb lenders allowed them to buy valuable options on house prices for free, or for very little. All they had to lose was a few years’ worth of good credit. Not a big price to pay for someone with no money and limited prospects.
Let’s say the monetary value of poor credit for a few years for such a person is $20,000. That’s their downside. If they bought 8 properties worth $300K each, and the properties went up by 50% over 3 years (not unusual in recent times) they probably netted almost a million. No one could know the future, and the gamble for recent buyers is turning out badly, but it was a gamble heavily loaded in favor of the ‘dumb’ buyer.
