Rich Dad's Advice

Posted by: Chris Palmeri on August 28, 2007

Robert Kiyosaki says he called the housing bust as far back as two years ago. “I was saying get out,” he says. Kiyosaki became a very, very rich man thanks to his 1997 book, “Rich Dad, Poor Dad,” in which he argued that Americans needed to take more risks. In the book he says he made his pile in real estate and small company stocks. It’s has been on best-seller lists for years, selling 27 million copies, and spawning 12 sequels, Kiyosaki thinks. “I stopped counting,” he says.
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“I thought the real estate boom was a dot-com all over again,” he says. “It was hard in 2003 to 2006 to make a deal.” Now Kiyosaki is advising that investors plunge in again, selectively. ‘It‘s the same fundamental problem, an overheated market. We’re coming upon it right now. This is the best time to invest. The people who are losing money are flippers, developers who came late to the party, every time there are cranes in the sky, I am strictly cash.”

So what exactly does Rich Dad suggest? “The people getting hammered right now are capital gains folks. I’m a cash flow guy. If it doesn’t make me money today, forget about it. When you find someone who just wants to unload something you can make a deal. It’s really the best time for a professional investor.” Kiyosaki does say he expects another recession, a “ripple effect” from the construction industry slowdown and consumers burdened with debt. Sounds like it’s also time for another book.

Reader Comments

Don ONeil

September 5, 2007 10:51 AM

This article confuses me! I think he is saying it is the best time to invest in the real estate market? But he is strictly cash?

And he says it is the best time for a professional investor, yet he is expecting a recession?

michael

May 23, 2008 12:21 PM

Right now could not be a better time to buy a home! The primary difference is right now in the state of Colorado we are not "down" we are just slower than the last 5 years that have been historically high! It’s really all the "bad press" that you hear daily which suggests things are bad. If I told you several times a day that you look sick - and I continued to tell you that day after day – eventually you would start to actually feel sick!

What's going on in Colorado real estate right now is just simply symptoms of the above. Most of the issues are not reality based for our regions true statistics. Based on 10 year averages we are just slightly behind the curve for average amounts of sales. With interest rates still at 30-40 year historic lows, buying a home right now is a great deal. You will be able to take advantage of the folks feeling "sick" and who will be happy to "sell with out much of a challenge to your offer – since they have accepted that things are bad! Investors should be scooping up all these cheap houses on the market.

The final and most important reason to buy now is – prices have been flat for several years in our area – if you buy now, you will be in a position to ride the real estate wave back up - instead of waiting until you read "good things" in the media reports again – by then it will be too late to capture a great equity position in the near future by purchasing a home right now!

I think real money is to be maid in buying houses cheap right now or investing with a smaller builder on a specific project.

Michael
www.ArtesianVC.com

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About

BusinessWeek editors Chris Palmeri, Prashant Gopal and Peter Coy chronicle the highs and lows of the housing and mortgage markets on their Hot Property blog. In print and online, the Hot Property team first wrote about the potential downside of lenders pushing riskier, "option ARM" mortgages and the rise in mortgage fraud back in 2005—well ahead of many other media outlets. In 2008, Hot Property bloggers finished #1 in a ranking of the world's top 100 "most powerful property people" by the British real estate website Global edge. Hot Property was named among the 25 most influential real estate blogs of 2007 by Inman News.

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