Real estate tapes are everywhere
Sometime at the beginning of interviewing season, I was eating breakfast my hotel room, transfixed by an infomercial on real-estate tapes. Using his special System, this guy said, you could make TENS OF THOUSANDS OF DOLLARS PER YEAR, ALL WITHOUT USING YOUR OWN CREDIT. Clearly this was complete crap. The infomercial droned on. Jim, shown smiling here, raised his salary by $15,000 in one year! Susan, using the special System, sold a house for a net profit of $20,000! Sally was able to pay off her elderly mother’s credit card debt!
It was early. I was suffering from an unfortunate difference in time zones. I was too lazy to change the channel. So I sat, and ate my breakfast, and waited to see how long it would take to get brainwashed. Well, maybe… if it was an expensive house, you might make $20,000 profit, right?
This was the first time I had heard about real-estate tapes, but soon they were everywhere. The next weekend, I was watching Garden State, in which a middle-aged mother nags her good-for-nothing, gravedigger son to improve himself by buying and using the real-estate tapes. And then, this last week, I found out that my cab driver was a convert.
Let me back up. Do you remember Rat Guy? Rat Guy is the cab driver in my area who sometimes brings his pet rat around on the front seat of the taxi. Rat Guy has some amusing stories to tell about carrying around a can of baked beans to bash in the head of any lowlife/gang member/thug who should choose to challenge him. However, he kind of scares me. And if I call the main cab number and don’t specify a driver, he tends to show up. One time I got a nice, polite guy instead. I asked him if he knew the guy with the rat. "A rat? Yeah, we have a guy with a rat. I don’t know his real name; everyone calls him Psycho," said NormalCabDriver.
Yeah, well that did it. From then on I called NormalCabDriver directly. NormalCabDriver has a positive, upbeat attitude guaranteed to cure my over-educated intellectual angst. "Another trip this week," I said. "I’m getting really exhausted. I don’t even really want to go."
"Well," said NormalCabDriver, "when you have a goal in life, you do what it takes to reach it."
Oh yeah. Clearly that was the right attitude. I stood corrected.
So imagine my disappointment when I found out that NormalCabDriver, font of wisdom of the Common Man or whatnot, has fallen prey to real-estate tapes. "I’m starting something new," he said. "I’ve been going to workshops and studying tapes on real-estate investments."
Oh no, I thought, and asked: "so how does this work, that you can buy houses without using your own credit?"
Apparently the whole idea is to look for a house that’s on the market for less than the average recent sale price for homes in it’s neighborhood. You buy the house and fix it up and try to resell. The catch? If you don’t have your own credit, you get the money from a third-party private lender that no doubt charges you some insanely high interest rate on the loan and demands payment within some very short amount of time. I tried to point out the riskiness of the venture.
"Oh no," he said. "That’s why you calculate it all out ahead of time. You figure out how much you are buying for, how much it will take to fix it up, and then how much you can sell it for. Then it’s no risk at all."
"Uh, yeah, but what if you don’t sell?" I asked.
"That’s why you pick the neighborhood right," he said.
He saw I was still skeptical.
"Well, if that’s too risky for you," he said, "maybe you’d like the other workshops I’ve been going to — they teach you how to design web pages."
