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Thoughts on Casey Serin and Iamfacingforeclosure.com
June 3, 2007 |
Had a comment recently about the whole Casey Serin/Iamfacingforeclosure.com fiasco, which I have to admit I’ve been checking out daily for awhile now. Anyone reading this is likely familiar with the situation but here’s the short version:
24 year old “investor” in California drops tens of thousands of dollars on “guru” REI seminars, and proceeds to quickly buy seven or eight properties (some sight unseen) in multiple states, all despite the fact that he had no savings and was making something like $50K a year from his day job. How’d he pull that off? He flat out lied on mortgage applications, inflating his income and claiming that he was going to occupy each and every property. More importantly to his house of cards, he was illegally taking cash back under the table on each deal, secretly agreeing to inflate the purchase price so that he’d have the capital necessary to keep the whole thing afloat, as far as making mortgage payments and repairs. His “plan” was to flip the properties for a profit, so that when his illegal cash back stash ran out, he’d have profits from the sale of the first few properties to keep the whole scheme chugging along, allowing him to buy more properties, get more cash back, etc.
Surprise surprise, none of that worked out, as he managed to buy in at the absolute top of the real estate boom in California, almost always at inflated prices to get his cash back under the table. Exacerbating the situation was the fact that he quit his job and had no income at all, and proceeded to max out credit cards and any and all credit available to him, including bogus business lines of credit he established, his wife’s credit, loans from friends, and even credit from sharks such as CashCall. All of which he eventually defaulted on. He managed to arrange a short sale and a wrap for a property or two, but the majority of the properties he bought went to foreclosure.
His site (which is offline now, due to his wife finally putting her foot down and demanding he got a job or else) was pretty soap-operatic, as he basically gave up on salvaging his properties and was trolling for attention, intentionally baiting readers who kept getting upset at his steadfast refusal to get a job, and his assurance that he had lots of “sweet deals” in the works and that this was just a bump in the road, as far as his ultimate success at real estate investing.
I honestly thought for a long time that it was all a scam, designed to drive traffic to his site/blog, which he’d then monetize and make lots of cash from. It just seemed far too intentional, as far as his ability to screw up at every step, and infuriate readers, as he managed to epitomize all that’s wrong with the get-rich-quick-lie-if-necessary-but-never-ever-do-a-lick-of-honest-work mentality. But he turned out to be a miserable failure at even making money off his gobs of traffic, and, ironically, only figuring out how to make some cash from it shortly before his wife demanded he shut it down.
Pretty much until the bitter end, he claimed he was a victim of bad timing, more than anything, and that nothing he did was wrong, and that it was the fault of the mortgage lending industry that he was given all that money to fuel his buying spree, and that his cash-back deals under the table were something that everyone was doing, yada yada yada. He claimed those shenanigans were just temporary and necessary to get his foot in the door, after which point he’d be a model, upright real estate investor.
I think the only real lesson to be drawn from his whole sordid saga (as far as other investors viewing it from afar), is that if you’re lazy and looking to get rich without doing any work, you’re 99.5% likely to fail. That’s really it. Could a “smart” investor use cash-back deals under the table and mortgage fraud to spin up a real estate empire out of nothing, with no money-down and no savings? Well, sure, in theory, but it’s a self-fulfilling prophecy for most people who go down that road. They fail because they’re failures, due to a lack of work ethic and a propensity for greed much larger than their legal, available means.
Casey’s failure had nothing to do with real estate. It had everything to do with the fact that he was lazy. Even if he’d bought at a better time and been able to flip some of his properties for a profit, he’d have just kept pursuing cash-back deals, or gotten sucked into some other boondoggle that promised him an even greater payoff, with no work whatsoever required of him, other than cashing checks from his sweet deals.
Moral of the story? If you want anyting in life, you can’t be lazy.
