Leveraged to Real Estate too Much

Doesn't it seem like a lot of the real estate "investors" we have been reading about over the past few months also have full time jobs in the real estate industry?

I almost think that the boom of the past 18 months has been partially driven by realtors themselves buying up investment properties because of their own percieved industry expertise. When the bubble bursts these realtors are going to suffer from a loss of income at the same time that their real estate investments go into the tank. The bursting of the bubble becomes almost self fulfilling at that point.

-Realtor commisions decrease as the number of transactions fall.
-Commision dollars are insufficient to pay the monthly expenses of the real estate investment.
-Investor (realtor) is forced to sell the investment at a lower price.


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[But permanence is not a priority for Bob Dougherty, who has purchased a total of four homes in Scottsdale, Ariz. His primary residence is in Camarillo, where he works as a real estate agent for Coldwell Banker. He initially bought a second home in Arizona so his wife had a place to stay while finishing up her doctorate at Arizona State University.

The other homes were purchased merely as investments. "I see them as little 401(k)s," he said. "Ultimately, the three properties could end up generating some income for us."]

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