Under this logic: * Car salesman are guilty for all sppeding tickets and high speed crashes. * Gunshops are guilty for all murders. * Motel clerks are guilty for unwanted pregnacies/ STDs. * Liquor store clerks are guilty for alcoholism. * Match and lighter makers are guilty for arsons. * Retail stores are guilty for murders commited with knifes (even if those knifes were intended for cutting bread). * Webmasters are guilty for internet addiction. Those who refuse to take responsability in their lifes, always end up with someone who manages their life (for a hefty fee), thus ending up either: A. Socialist B. Gay
Obviously the folks in the story above are criminals, and it sounds like the system is getting around to dealing with them exactly as such. However, In my experience the vast majority of Real Estate and Real Estate Loan Brokers were just as caught up in the bubble and stupidity as the average Joe. There were a ton of courses being offered to become a realtor or a mortgage broker and make a ton of money. It was very much like the daytrading craze that happened in the late 90's, and the same type of people were suckered in yet again. Of the real estate and mortgage brokers I know, the vast majority of them are hurting more than any other people I know, especially the ones who had been successful. The reason for this is that they got used to living on nice commissions, but you don't get any commissions if you dont have any buyers or sellers. Not only did they get used to having nice commission checks the majority of them if they had been successful purchased as much investment property as they could afford. They are now in a lot of cases stuck with places that are worth substantially less vs what they paid for it and having to pay mortgages on investment properties when they can't even make their own. One example of a guy I know who was not a realtor or mortgage broker but got into investing in Condo's. He's 62 years old and is a successful small business owner. Net worth was around $5million. He bought a pre-construction condo in Naples for which he had to agree to put $15,000 and then come up with the mortgage to complete the purchase 30 days before the building was complete. The condo was offered at a reduced price of $325,000 and they would be sold at $375,000 once the building open. Well, as the real estate market took off the places actually started going for about $450-$500 when the place opened. He sold his for $460,000, a pretty sweet profit of $135,000 on a $15,000 investment. I think it took 14 or 16 months. He thought wow this is swell. He took half of the profit and put it away for a rainy day and took $60,000 to find another deal. He found another one, required $12,500 down on a $250,000 unit and he got 5. Fast forward 11 months and they are selling for around $335,000 so he sells with a profit of $85,000 per unit (more profit on one single unit than he invested in all five), or $425,000. Now he got greedy and screwed himself. He found a luxury building going up in Miami Beach. His plan was that he could invest in several units and add at least 2/3 to his net worth and finally retire. The units in the building where pre-offered at $925,000, and everyone expected them to be going for $1.2 to $1.5 million by the time the building finished up. It cost $50,000 to secure one. Roger's eye's turned to dollar signs and he secured 10 units. Construction ran into several delays and meanwhile the market started to crash in Miami Beach. When the units came available he could have gotten out for around $875,000 to $900,000, but he convinced himself of two things, first that this was just a minor and temporary glitch in the plan, and second that there was no reason for him to lose nearly $400,000 when everyone knew Real Estate in Florida only went up. So he waited. The places are now selling for under half a million dollars and Roger has not been able to meet the mortgage payments on them since June. He faces a loss of around $3 to $4 million, meaning that he worked his ass off since he was 15 years old (47 years) and thought he was very well taken care of. Well, he's not. He'd planned to donate his SSI check to charity every month in 3 years when he started to collect on it, he's now thinking of starting to collect it early because his cash flow situation is terrible. I think that his story is probably fairly typical of what a lot of realtors are also facing right now in the market. Brandon
1) The notion that young punks with no skills and half a brain should be able to make millions on the back of the real estate market is an obscenity beyond words. Makes you want to go socialist. Almost. Better they get bankrupted. 2) NPR Radio interviewed vermin that were making huge money pumping out mortgages for repackaging. They speak proudly of it, and are sorry it stopped. I fully understand the mentality of these assholes. No pity from me. No mercy. The difference between me and most here is that I would have shut them down and locked them up LONG AGO. I think they should be made to give back the money they made in the middle of a giant ponzi scheme, Instead, they are reaching into MY pocket. F#$k Them.
How are they any different than people who got into the daytrading thing in the late 90's? It was the same gold rush mentality, and I know a ton of people who failed at daytrading that went on to real estate, either as RE Brokers or Mortgage Brokers. Some made it, most did not. Those that made it worked hard.
It's called a wake up call about the reality. Lot of of these cases in NYC. These guys think they are sooooo smart cause they happened to catch onto some success in their life. The reality is that they simply got lucky in the game of life. Very few of them ever realize that it's just money supply manipulations that grants them their success and then takes it away.
Historically, there will always be cyclical jobs/opportunities that over pay... its how those industries recruit talent from fields with more stability. Eventually most non monopolistic endeavors get so crowded it is hard to eek out normal profits. Eventually bubbles clean most everyone out when they pop. Econ 101 I see bubbles as opportunity. You have to position early and get out in time if you own money is at risk. So far I am 1-2 in bubbles I hit... I never got into poker. But, I am already ramped up on the new bubble. Real estate an loan workouts.