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Updated over 10 years ago on . Most recent reply

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125
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Brendan M.
  • New to Real Estate
  • Colorado Springs, CO
86
Votes |
125
Posts

How did the 2008 crash change REI?

Brendan M.
  • New to Real Estate
  • Colorado Springs, CO
Posted

I'm pretty new to REI, and I've been reading a few books lately, but a lot were written before 2008. Not too say they have bad info because I think a lot of the principles hold true today and are excellent advice, but there is certainly a naivety in some of them that is only apparent in retrospect, especially the ones who talk down the RE bubble doomsayers of the time (I'm looking at you, Larry B. Loftis!). Is there anything we learned from the housing collapse that we didn't already know? Is the way we estimate appreciation or the value of a deal any different than it used to be? Any context, wisdom, or anecdotes are welcome.

Most Popular Reply

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2,325
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Brian Burke
#1 Multi-Family and Apartment Investing Contributor
  • Investor
  • Santa Rosa, CA
7,015
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Brian Burke
#1 Multi-Family and Apartment Investing Contributor
  • Investor
  • Santa Rosa, CA
Replied

The biggest losers were the real estate crusaders--the average everyday folks with a dream.  It was a frenzy.  People would say, "my plumber just made $100 grand this year on a rental house, I'm going to get one too".  Two years later both the plumber and the client, and thousands like them with similar stories, were upside down on one or more properties that were all negative cash flow and soon found themselves in foreclosure.  Each of these people may have lost moderate sums of money but collectively as a group the losses were massive.  The biggest losers were their lenders.

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