Speculator Frenzy A Sign Of A Top
The Seattle Times has an article documenting just how far people are undoing their lives in the hope of a quick buck. "Paul Galasso quit his Costco management job to join his wife, Evelyn, as a full-time real-estate investor. He and his wife have spent more than $20,000 on investor 'boot camps' and seminars to learn how to make deals."
"Galasso said he knows people just like him in Georgia, Texas, California and beyond now investing in residential property. 'I lost a ton of my portfolio in 2001, and that's happened to a lot of people in America,' he said."
"Galasso and his wife fired their financial planner and shifted 75 percent of their retirement resources from regular equities and mutual funds held in a traditional IRA into a 'self-directed' IRA that they can use to fund real-estate deals."
"Michelle Dickerhoof, quit her corporate-affairs job at Starbucks last fall to collaborate full time with her contractor husband to find fixers to invest in. She's just secured a home-equity line of credit on her primary home to pay for the new properties. She expects the two properties she's eyeing could be resold for around $400,000 after they're fixed up."
Jeff Wolfson, a developer said, "I've been in the industry long enough to see how it operates in cycles. I believe the market right now is in a bubble, people are putting 10 percent or 5 percent or zero down, or they're taking adjustable rate mortgages, but then one day their renters can't afford the rent, and the owners aren't prepared for that."