Love of Real Estate Riches

You really have to love something that makes a lot of people happy and rich! Up until the market turned hundreds of thousands of people we’re getting H-A-P-P-Y in real estate, and many we’re getting rich.

real estate flipperIt was really pretty difficult to make a mistake in the early days of the real estate boom. Millions of ordinary people began calling themselves real estate investors and many of them had the good ol’ luck of the Irish. If timing is everything in investing, then millions of real estate purchasers, who had never invested in real estate before cashed out in the hey-day of the boom. They had timing!

Bob Griffin waited to sell his San Diego, California apartment complex for 10 years before the frenzy hit. He patiently waited, monitored the market and managed his 155-unit complex until finally he thought the market was ripe. He saw what he thought was a peak in the market coming and didn’t want to wait any longer to sell. He cashed out, netting a profit of more than $4.2-million. It was his long sought after pay-day.Upscale Home

Bob retired from his full-time job with his nest egg.. “Thank God we sold when we did,” Griffin said by email from Costa Rica, where he and his wife now make their home in a 5-bedroom, 6,000 square foot like mansion with a view of the ocean. “We really didn’t know what was going on with the market except that it was getting a little crazy. Prices were going up so fast.”

There are hundreds of thousands of Bobs in America these days, maybe not making as much as Bob in the frenzy. But today they quietly thank their lucky stars they sold at the right time. Bob is like many millionaires today, leaving the U.S.A. in all-time record numbers.

The real estate frenzy that America enjoyed during the middle of this decade may go down in history as being the mania of all manias in real estate. Bankers and Wall Street traders were pitted as an unlikely match producing what seemed like a never ending load of nearly artificial cash manufactured on Wall Street to loan to willing investors and homeowners.

More than three years later housing markets would still be reeling from it’s after affects. The fall out drove the country into an economic recession of monumental proportions that could, without proper government action, pull the entire nation into a financial calamity topping the Great Depression.

There are many lessons to be learned from the real estate bust, not the least of which is the fact that free markets need proper regulations, oversight and controls. Otherwise the free market turns into a chaotic place and the entire economy falls into a financial mess.

There’s also the fact that for every Bob Griffin there are others who are not as fortunate. Some bought mortgages they thought they would refinance to only learn later that refinancing was a myth. Others simply bought mortgages that were unwise or foolish. Some took out loans as if it would be the last chance in a life time to buy a house.

As times change and the economy tightens mortgage lenders changed the rules, even their business models.

The fast money made by flippers in places like Las Vegas’ housing market at the height of the boom drove many to madness as prices soared higher, inflating some 49% in one year alone. Las Vegas was the epicenter of subprime and adjustable rate mortgages.

Life seemed easy as the good times rolled and the money flowed. It was like hitting a jack pot in Vegas. However, just like standing at a Las Vegas crap table rolling the dice gambling, there are no guarantees at winning in investing. Veteran investors will tell you its all timing.

Millions of Americans suffering through the worst foreclosure epidemic in history have learned their timing was rotten. Every 13 seconds another foreclosure takes place. Many of the people who really loved the frenzy now equally hate the real estate bust and its related economic turmoil. Love and hate are two huge emotions, an unhealthy mix.

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