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Extreme Real Estate

Posted by Paul on November 29, 2006

There’s a young man named Casey Serin who has been blogging about his real estate disasters. He decided to get into real estate by flying around the country buying property hoping it would increase in value. He didn’t have the cash flow or a plan about how to rehab the properties. Now he is facing massive foreclosure. He could even face criminal charges since he has publicly admitted mortgage fraud. The irony of his situation is that he has been able to generate such notoriety thanks to the Internet that he could end up getting rich by being really foolish and unethical.

Back in 1984 during a previous real estate boom, my brother was in New Jersey buying a rehabbing houses and making enormous profits. So, naively, I thought I could do the same in West Virginia. Thanks to changes in laws in 1980 to help the Savings and Loan industry, these “banks” were awash with cash. Within an 18 month period I was able to purchase 10 houses. The S&L didn’t seem to care about the rental income (there was none – the houses were trashed) or how I would pay the mortgage. I didn’t have to lie about anything. I just made my payments on time and every-time I went in for a loan, 20 minutes later I had a new mortgage. Of course, many S&L’s were doing the same thing and not everyone was paying their mortgages like me. This lead to the S&L Crisis

In the Tax Reform Act of 1986 Congress in their wisdom made it less profitable to own rental properties and eliminated passive losses on income taxes.  This law led to a real estate collapse. Of course, in the city I lived in we were not only effected by that law, but by a 35% decrease in population.  Those two factors made my real estate investments nearly worthless. Despite this, over the next few years we tried to sell the properties financed by the S&L’s off and often I had to take a loan out when I came to closing instead of receiving a check.

We lived in a large, beautiful 4000 sq ft home that had been designed by a student of Frank Lloyd Wright, but we sold it to go live in a trashed out triplex infested with cockroaches. Over the next two years we gutted that house from top to bottom and converted it back to a single family home. It took six months to get rid of the cockroaches, there was plaster dust every where and we cooked with nothing but a microwave the entire time (much easier to  do today than back then). We had 3 little kids under 6 years of age at that time. Knowing what we know now about lead paint, I feel pretty bad about them living there.  But somehow we survived and were able to sell the house at a small profit.

We lost well over $100K during that real estate venture and I think somewhere in my indebtedness I am still paying for it. There are probably many people that have gone through tough times like Casey.  I find it fascinating when someone like him can turn their foolishness into something profitable and gain fame.  I don’t know if this is due to luck, hard work, charisma or what. So far I have not been able to turn my many foolish mistake into much of anything. Some days I’m not even sure if I have learned anything. Here I am in my 50’s contemplating investing in real estate again. Can I succeed this time?  Casey still has many years left to correct his errors. Time is running out for me.


8 Responses to “Extreme Real Estate”

  1. […] After posting about Casey Serin, I spent most of the night thinking about the role of luck in my life and whether I should believe in it at all.  All of the successful people I have met have outwardly stated that they believe their success is due to hard work, persistence, good organization, etc. Few seem to think that they were just lucky. On the other hand, nearly every poor person I have known (between having rental property for 10 years and trying to recruit people into Amway for an equivalent length of time, I met literally hundreds and hundreds) blames his or her lack of success on bad luck. […]

  2. Abi said

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  4. Soem Dood said

    After tiring myself out trying to figure out what the heck this dude Casey Serin is actually up to, I finally found a place that catalogs his activities, history, associations, and purpose.

    The site bills itself as “the leading semi-satirical wiki about foreclosure blogs”, and I’d say that’s accurate, given the predictably rather vertical market for “semi-satirical wikis on the topic of foreclosure blogs.” Still, it’s a good read.


    Casey Serin

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