The Good, the Bad & the Ugly - Posted by Hank FL

Posted by Bryan-SactoCA on October 27, 2003 at 12:08:30:

If you haven’t read Kiyosaki’s book Rich Dad’s Prophecy borrow a copy and read the first half. There’s a good discussion in there about how most people want security in their lives and investments. They flocked to mutual funds because they believed that they were secure investments. Now they’re pouring into RE because they believe it’s secure. After the RE bubble pops they’ll probably go back to cash in the bank. Despite whether you believe RK’s overall premise, the book is a good read just for this discussion.

The Good, the Bad & the Ugly - Posted by Hank FL

Posted by Hank FL on October 26, 2003 at 09:48:47:

Not to mention the moronic, maniacal & meshuganah.

I’ll start with the good. If you’re from NY, you know who this guy is. Looks like he’s doing well now in real estate:

http://www.centredaily.com/mld/centredaily/news/7058297.htm

Now this stuff falls into one category of ugly or another. “If it bleeds, it leads” .

Maniacal:

http://www.insidevc.com/vcs/sp/article/0,1375,VCS_170_2318619,00.html

Meshuganah:

http://www.tennessean.com/local/archives/03/10/41241398.shtml?Element_ID=41241398

http://www.wbir.com/News/news.asp?ID=15139

Moronic:

Foreclosure sale/leaseback backfire:

http://www.kare11.com/news/news-article.asp?NEWS_ID=53993

Back to the good:

http://www.zwire.com/site/news.cfm?BRD=1163&dept_id=97662&newsid=10389055&PAG=461&rfi=9

Can’t get a good deal on an REO ? Rents a little flat ?

http://www.heraldtribune.com/apps/pbcs.dll/article?AID=/20031012/NEWS/310120618/1200&cachetime=5

The IDEAL investment ?

If you’ve made it this far, you may have noticed that many of the above clippings where not so flattering to the “We Buy Houses” crowd.

I wonder what would happen if a professional pollster like Gallup or Zogby asked a coupl’a thousand people what their impressions are of “We Buy Houses” investors.

I wonder.

BTW, I wasn’t even looking for all those bad stories - they just sort’a jumped out at me over a few minutes time.

Re: The Good, the Bad & the Ugly - Posted by jasonrei

Posted by jasonrei on October 27, 2003 at 09:15:21:

Interesting articles. There are so many scam opportunities available in real estate, and so much misinformation.

I’m amazed at how people actually believe there are guarantees in life. I wonder if it’s always been like this, or if people in general have given up more personal accountability.

The “New Math” in RE inv - Posted by rm

Posted by rm on October 26, 2003 at 12:00:51:

>

This is the same argument Prudential, et al. were using to get “investors” to buy oil and gas limited partnerships.

The “investors” lost all their money, and class action suits were eventually filed and settled for pennies on the dollars.

The upside, which I’ve been saying for two years now, is that this creates a good opportunity for those who CAN find a good deal to flip to those who don’t know a good investment from a bad one.

Time to sell?

The flipside of that is… - Posted by Bryan-SactoCA

Posted by Bryan-SactoCA on October 26, 2003 at 19:46:39:

that there will be a lot of “investors” in way over their heads in a couple years. The ultimate motivated sellers.

Re: The “New Math” in RE inv - Posted by Hank FL

Posted by Hank FL on October 26, 2003 at 13:46:31:

I think you’re talking about one of these two links from my post:

Can’t get a good deal on an REO ? Rents a little flat ?

http://www.heraldtribune.com/apps/pbcs.dll/article?AID=/20031012/NEWS/310120618/1200&cachetime=5

The IDEAL investment ?

http://www.signonsandiego.com/news/business/20031005-9999_mz1b5money.html

I agree with you. Many deals out there in hot markets are skinny, but who says one can’r flip them to civilians that think that’s OK by them.

And who’s to say they’ll be wrong in 20 years ?

Getting blood from a stone - Posted by rm

Posted by rm on October 27, 2003 at 18:11:12:

I’m only wondering where the profits will be.

I suppose I’ll be shorting rentals then.

There’s some saying in commercial real estate- I won’t get it right here- but it’s something like:

  • The first buyer buys because he has a dream

  • The second buyer buys because he’s getting a deal

  • The third buyer actually makes a profit

To getting there… third!

Re: The flipside of that is… - Posted by John V, FL

Posted by John V, FL on October 27, 2003 at 01:30:06:

What will they do once burned by both the stock market and real estate markets? Maybe they’ll feel finally feel secure investing in 8% long term cds in a world of 12% mortgages and 10% inflation rates.

Re: The “New Math” in RE inv - Posted by John V, FL

Posted by John V, FL on October 27, 2003 at 01:26:38:

I find it interesting that both articles mentioned not worrying about the short term bumps in the road as over the long term property will always go up if you can get past them. Only in this case it could be 15-20 years from today’s levels in many bubble areas. Will most landlords have the stomach to take the much higher negative cash flow than anticipated as they get hit from all sides in a world of flat to declining prices? My guess is starting within 2 years a big pool of motivated sellers will be those who recently started calling themselves investors.