Take this with a grain of salt, as I have a miniscule amount of experience as the rest of you....
My opinion (maybe influenced by the fact that im considering it and in the position to do so) is that the Cash Out strategy is still a great strategy. That said, I will say it is ONLY if you buy right. Back in the boom, prices were high, appraisals were extremely inflated, and investors that David speaks about leveraged out these properties to a point (I am guessing) where they barely cash flowed, or broke even, gambling heavy on appreciation and principal accumulation. I find this mind boggling, because even as a 26 year old newbie, and before even reading more into it, I came to the conclusion that I if I cashed out, my SFH needs to cash flow at least $2-300 a month at current rental rates. What if (because of multiple variables) rents drop $1-200 a month!? You may have just hosed yourself. This also gives you room to accept less rent, if need be, in order to keep the property filled 100% or close to it.
I think it is a viable option these days IF.
1. you buy right/deep discount
2. study comps in your area to find the exact ARV
3. rehab the property out of pocket on things that will specifically increase value - maybe work hand in hand with a private appraiser for an opinion/advice on where to prioritize your improvements?
4. know exactly what it will rent or sell for finished, if a BAH/rental make sure to leave yourself cash flow. Conservatively $200 a month or more.
Again I dont have much experience, but this is my opinion/thoughts thus far.