Friday, May 18, 2007

That's The Way Bubble Bursts

There's not very much blog worthy out there right now, and the Day Job is taxin' a brotha right now, but I couldn't help but comment on this article I recently ran across.

As you guys know, I'm a real estate junkie, albeit more as a spectator (home owner) than an actual player (landloard, flipper, property investor). With the NBA Playoffs officially a snoozefest, My favorite shows (now that the Shield is done for the season again) all involve houses. My love for A&E's Flip This House is well documented. While the show looked like it was gonna dissolve to crap the first episode this season, thankfully they've refocused on the Montelongos and Wilifords. Than and Company are M.I.A., which is obviously a good thing. Even better, Richard, Fugly Ginger, and the rest of the Trademark Properties crew have resurfaced with their own show, the lazily named The Real Deal on TLC. It's more or less a copycat of Flip This House, with slightly better graphics. You can't beat having two shows! It's like Christmas in April. Ditto for Buy Me!, House Hunters, Sell This House, etc. Seriously this is about all I bother Tivo'ing.

It's easy to understand how folks can watch these shows, and see instant dollar signs. On TV, they easily find undervalued homes in neighborhoods that are stable and safe. Financing is never a problem. Contractors are always on time and on budget. Houses sell immediately. Profits are through the roof.

This is, of course, still TV, specifically reality TV, and undoubtedly, there's some scripting going on here. TLC's Trading Places was notoriously busted for over-representing the amount of work the actual couples do. Turns out, they have a staff of 20 some people who do a bulk of the remodeling, painting, and construction when the cameras are off. The "master carpenters" on these shows are little more than actors who can flip the power switch on a band saw. As addicted as I am to the "flipping" shows, I wouldn't put it past them to adjust numbers and make the whole industry seem far easier and more profitable than it really is. I knew this was becoming an epidemic when the dude who sells DVD's in my barbershop announced that he was "going legal" and getting into flipping homes. He disappeared for about a year, until I saw him last week. He had a boatload of Spiderman 3's. Needless to say, his career as a flipper was short lived.

These shows should probably feature some "don't try this at home" disclaimers. I'm sure Casey Serin would agree.

Long story short, this d-bag, a 25 year old Californian, got himself in a boatload of trouble by trying to follow the Rich Dad Poor Dad path to real estate wealth. This dude, barely making ends meet as a web developer, falsifies loan applications (a felony), overstating his income (such applications are seldom checked since lenders are so greedy and don't really care if you get foreclosed on) and eventually ends up owning as many as 10 homes. Of course, since the dude is a moron, the houses either eventually sold for a loss, were rented out for a loss, or went into foreclosure. His credit is shot fo' life, he's back to living with his mom, and his wife is probably going to leave him any minute now. What a winner!

Of course, just to prove my theory that white people can more or less make money off everything, he's now turned into an Internets Celebrity of sorts, with a wildly popular blog, loads of press coverage, speaking engagements, and a book on the horizon. He has come to more or less personify the perfect storm of greed, prosperity, and corruption that are the US Housing Market.

This stuff all makes me happy that I didn't take the plunge into "flipping" at the height of the market a few years back. I could very well have been another Casey Serin.

Then again, maybe not. I don't believe everything I see on TV.

Casey Serin: The world's most hated blogger?

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