- Bargaineering - http://www.bargaineering.com/articles -

Real Estate Pigs Getting Slaughtered

It’s always exciting whenever you hear stories of how much Joe Schmoe made a bundle as a bubble expanded, but it’s always downright awful whenever you’re hearing stories on the backside of that same mountain. Think what you want about Kiyosaki (Rich Dad Poor Dad) and the ideas he’s espoused, but what he does have is experience with real estate and in troubling times it’s that experience that will carry you through the day. Kiyosaki is also the first to discuss how real estate speculators are getting slaughtered by their alligators [3]. An alligator is what he, and I assume real estate investors since he uses “we,” calls those negative cash flow real estate properties many speculators are holding onto in this softening market.

One quote is especially poignant: “Yet it’s the amateurs who come late to the party — and who eventually donate their money back to the professionals.” This applies as much in real estate as it does in the stock market and even in poker. Something gets popular, suckers come in, and the suckers get cleaned out. The article is a quick read and sends across some good points (perhaps borderline obvious, but good nonetheless) if you have a free moment.