Some of Us Still Think They Can Get Rich Quick from the Real Estate Bubble

By Joseph Huff-Hannon, New York Press. Posted May 2, 2009.

My path to real estate riches began on the New York subway, when I grabbed a copy of a free daily rag one morning to read on the way to work. On the same day that Bernie Madoff pled guilty to the biggest investment fraud in Wall Street history, I was intrigued to find a full-page ad with the blaring headline:

"HOW TO GET YOUR SHARE OF TODAY'S TRILLION DOLLAR RECOVERY."

Besides details on a series of free, upcoming workshops where all would be revealed, the ad offered a mouthwatering menu of claims on "How to cash in on the biggest real estate liquidation sale in our entire United States history" and "how to maximize your profit with lucrative foreclosures." Even better was the claim that, "You can buy homes with little or no money coming out of your pocket. That's right: GET PAID TO BUY A HOUSE." There's even a quote from CNBC's embattled maharishi of mammon, James Cramer, citing the "precise date" that the housing market will turn around. If you care to mark your calendar, it's June 30, 2009; though given some of Cramer's other predictions of late, you might want to hedge your bets. Sold!

So, on a recent Monday afternoon, I went to the Roosevelt Hotel, a stately and well-appointed place just west of Grand Central where only the most respectable types might gather. Eighty or so of us took our seats in front of a large movie screen in an opulent banquet hall, as what sounded suspiciously like the theme music from Baywatch was piped in from speakers.

"You are all in for a real treat this afternoon," said Terry, the tall gentleman in a crisp blue polo shirt who took our registrations at the front table. He then handed over our nametags with our first name printed in big bold writing. As the lights were dimmed and the promotional film for the Robert Allen Institute's "Recovery Riches" program is queued, I was transported back to an era I naively assumed no longer existed when Flip This House was one of the most top-rated TV shows on cable and the phrase "no money down" was printed on many a mortgage brokers' calling card.

Not so. The video that segues in to the free two-hour "Creating Wealth with Real Estate" workshop is full of smiling people who presumably haven't read the news lately, as they tell us rubes in the audience things like: "No money down is possible, I've seen it!" and "Turn properties over to investors for quick cash!" Testimonials are given by people who claim to have made tens or hundreds of thousands of dollars in a matter of months in real estate, thanks to the advice and guidance of one Robert G. Allen, author of such books as The One Minute Millionaire, Nothing Down and Creating Wealth. A voiceover tells us that we too can be part of this talented class of real estate gurus, as images of a young woman riding a horse, a couple relaxing with glasses of wine in hand and a family walking along the beach flow across the screen. The video ends with a rousing tune and a challenge to: "Be Robert Allen's next millionaire!"

In a country where over 6,000 homes now enter foreclosure every day, and where millions of people's retirement income has been wiped out thanks to a financial house of cards built on dubious home loans, I found it curious that the best advice about how to cash in on the collapse of the real estate market might be found in a newspaper ad or on late-night TV. So did a lot of other people it turns out. The workshop was packed, and based on my conversations with many of the other attendees -- mostly middle-aged men and women, the majority of whom appeared to be immigrant New Yorkers -- the dream of quick money through real estate still appears to be a component of our hardwiring that is difficult to turn off.

As the economic crisis plunges more people in to unemployment, crushes investments and leaves more Americans homeless or dangerously close to it, it's not surprising then that these kinds of pie-in-the-sky, get-rich-quick schemes are coming out of the woodwork -- reminiscent of the army of snake oil salesmen that proliferated during the Great Depression. Then, as now, an expanding pool of desperate people searched for cures, hope and salvation. And in New York City, where real estate and God vie for supremacy, this kind of pitch is especially seductive. The remarkable thing is that with only a few minor tweaks, this "real estate riches" pitch is seamlessly adapted to our new, post-subprime-lending implosion era with relative ease.

Missed your opportunity to cash in on the housing bubble? Never fear, the Robert Allen Institute and its frontmen who roam the land will teach you how to find the silver lining in the real estate rubble all around us.

See more stories tagged with: new york, mortgages, housing bubble, real estate market

Liked this story? Get top stories in your inbox each week from Corporate Accountability and WorkPlace! Sign up now »