Interesting Times At The Real Estate Club

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There was definitely fear and loathing in Las Vegas at last week’s meeting of The Real Estate Insiders Club. As I’ve stated in previous articles, you get the most out of your local real estate club (Article) by networking with the other investors.  The recent spate of extraordinary events made this more true than ever. The difference in the atmosphere from the September meeting to the one in October was palpable. As I worked my way around the room talking with other investors the reasons were clear.

The Fear

There were a number of investors, novice and veteran alike, who had recently been through a foreclosure seminar and were excited about the possibilities in the market. However, it was the more experienced investors who were most fearful. Many of them had been investing for many years, if not decades, and had never seen anything like what we are experiencing now. There were mortgage brokers who were unable to get deals through because of the credit freeze and realtors who couldn’t make deals happen because their buyers couldn’t get loans. The big question seemed to be, would the whole house of cards that is the economy come crashing down?

Generally speaking, savvy investors can make profitable deals in any market, up, down or sideways. The concern is that there is a total lack of direction, they don’t know which way to turn. The Government bailout (now being called a rescue) is a big pile of money without a clear set of instructions on how it is going to be used. A big fear is that it is going to become a big cesspool of corruption, much like Washington itself.

The Loathing

The other thing that jumped out at me as I worked the room was the anger that people felt. There was anger that irresponsible behavior was being rewarded, why should those who made idiotic mistakes be bailed out? They were mad about the CEO’s who were rewarded with excessive pay, perks and parachutes as the companies they ran crumbled. There was resentment over the fact that greed had run rampant and left common sense in its wake along with the wreckage of banks, brokerage firms and insurance companies.

However the real loathing was reserved for our elected officials. The caped crusaders of the beltway who are supposed to be looking out for us, can’t seem to rise above their own self-interest. The House of Representatives couldn’t bring the $700 Billion bailout package to a vote without the House Speaker making a self-serving partisan speech that ultimately doomed the bill. It was left to the Senate to push a bill through but they couldn’t get it done without larding it up with billions more in pork. While Democrats and Republicans were busy playing the blame game and pointing fingers at each other, the members of the real estate club couldn’t believe that these clowns didn’t get it, people are fed up!

Economic Course Correction

The economic paradigm in this country is undergoing a major shift. That shift will bring with it new ways of doing things which, in many ways, will be a return to older methods. Imagine actually only buying things that you need and can afford? Picture yourself saving for something instead of using $0 down and 12 months same-as-cash gimmicks? How about a world where you prepare for the future instead of living only for today? Change is coming regardless of who is leading the next administration. The question is how many of us will remain standing when the dust has settled?

I am suspicious of the idea of a new paradigm, to use that word, an entirely new structure of the economy.
Paul A. Volcker – Former Federal Reserve Chairman

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3 Comments

  1. Great post, Richard. You’re completely right about things changing. What we’re witnessing is a fundamental change in the way we all do business. No one knows what the final result will be, but as you said, we do need to prepare ourselves.

  2. “How about a world where you prepare for the future instead of living only for today?” – too bad America is all about the right here right now instant gratification that it’s hard for people to comprehend that

    watch this video “real estate” by cadence weapon, very interesting :

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