Out of Control Subprime Lending

This is such a great example of how out of control mortgage lending became the past few years.

In Bakersfield, California a non-english speaking mexican strawberry picker with an annual income of $14,000 was lent $724,000 to buy a house!

I remember a couple years back a guy named Casey Serin appeared on Rich Dad’s insider videos to explain how he managed to buy 7 properties with no money and nothing down which he was planning to flip for profit. At that moment we had reached the top of the bubble and there were no more buyers. Now he was stuck with these 7 expensive mortgages and facing serious financial problems. I wonder how he is doing now. Hopefully he is working his way out that mess and doing better. We e-mailed back and forth a few times and he seemed like a pretty nice guy.

The lesson was never to speculate (at least not invest on the sole basis of expecting the price to go up) , always invest for cash flow or monthly returns.