kurt@fluke.UUCP (Kurt Guntheroth) (01/08/86)
In the widely discussed real estate deal You are assuming you can buy a
house for $150,000, refinance it immediately for $200,000, and sell it
immediately.
You must assume:
1. You can find a house actually worth $200,000 that somebody will sell
you for $150,000. Unless the seller is totally desparate this is
unlikely.
2. You can obtain $150,000 in cash. I think we all know the credit card
thing will not work. Nevertheless there are people in the world with
that much cash.
3. You can make closing and refinancing happen very rapidly. This normally
requires a very tight relationship with banks and title companies.
Maybe J.R. Ewing can make this work.
The joint probability of all these things working right, all at once, more
than once in a lifetime is infinitesimal. Maybe during the early seventies,
when real estate inflation make you rich even if you were stupid, this
worked. Maybe it just covered the mistakes. In the the eighties, these
techniques don't work, and their former practitioners have all wisely turned
to selling their experience in the form of seminars, instead of using it
themselves.