Bad Credit Online Magazine - Daily News and Advice on Credit, Debt and Mortgage : The guru of real estate investing is getting rid off his U.S. real estate holdings, should you pay attention?

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October 23, 2005

The guru of real estate investing is getting rid off his U.S. real estate holdings, should you pay attention?

The Warren Buffett of real estate is "methodically selling off his U.S. real estate holdings". Tom Barrack, the Chairman, and CEO of Colony Capital thinks that "there's too much money chasing too few good deals, with too much debt and too few brains." Pretty harsh, isn't it, he goes on saying the amateurs are going to get trampled. The seasoned pros should watch out before being taken down with them.

Remember Mr. Buffett telling everyone who cared to listen, how he didn't understand internet and technology stock lunacy and refused to buy them for his funds. Many shareholders got upset and he even apologized for missing some opportunities, many laughed that old man couldn't comprehend the stock market changes, but in the end, when bubble broke, Warren Buffet was the one laughing last.

Going back to Tom Barrack, I can't help but quote him some more - "I feel totally safe playing polo on a field full of pros. But when amateurs are all over the field, someone can get killed. They have more guts than brains. They charge after every ball and don't know when to hold back."

Interesting enough, Mr. Barrak thinks that the rising cost of labor and construction materials is the main accelerating factor, that will bring a real slowdown in real estate. He points out that construction costs have gone up 20 percent just in the last nine months, due to shortage of qualified labor and prices on lumber and oil. Oil is needed for pretty much everything from plastic piping to insulation to roof shingles.

 
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