Can you expand on this a little bit? I can't wrap my head around why getting a mortgage on a house that is going to hypothetically be worth 10% of its current value is better than waiting for a house's price to crash and then buying it with cash.
That was a quote from the article. It is a little hard to understand and he writes on the blog on the topic from time to time. A LOT has to do with where the Real Estate is located. Not all markets are going to see 90% loses. States that go broke and need to raise taxes to the nth degree on property will be the worst. Plus, this is more of a hedge. So even if the value of the house declines your payments are not going to change. He is also an advanced investor so probably looking at the opportunity to use the extra cash and as interest rates rise you can make money on the loan. It would be like borrowing at 3.5% and putting it into a CD at 7%. Renting would likely be another option for the average person.