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Meet the 24-year old with $2.2 million in debt

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Regular readers know that I’m not especially enthusiastic about investing in real estate (see here and here for examples of why), so this post won’t come as a big surprise.

But it’s not just about why I think stocks are better. Many of you have been hearing about the blog, written by a 24-year-old guy named Casey Serin who “bought 8 houses in 8 months across 4 states with no money down” and is now facing foreclosure. He has openly admitted to lying on his loan applications (to get more in loans), and to bringing his total debt to about $2.2 million ($140,000 of that is in unsecured debt like credit cards). In the meantime, he’s been blogging about his situation. His blog has gotten the attention of USA Today, the San Francisco Chronicle, NPR, and more.

There’s a twist to this story that nobody else knows: I know Casey Serin. We went to high school together. In fact, we ran the computer club together, which is how I got to be the cool guy I am today.

That makes this a weird post to write–not only because he’s done some really shady stuff that really pisses me off, but because he’s not just a one-dimensional character who deserves our scorn: He’s actually doing a lot of good, too. And that makes it hard to describe what I really think of the situation.

* * *

The story with me actually begins about a month ago, when I got an email from Casey out of the blue. I hadn’t heard from him since high school 6 years ago. (Emails reprinted with permission.)

From: Casey Serin
To: [BCC list]

Hi Ramit

I hate SPAM too! You’re receiving this because you’re in my personal mailing list. You’re a friend, family or an acquaintance or past co-worker or client. If you don’t want to receive occasion updates from me please use the automatic unsubscribe link at the bottom. Thanks!

Long time no talk! Yes I have not been good at updating everybody and keeping in touch. So here is a 1) quick update about what I’ve been up to, and 2) an opportunity to put your money to work with us in the real estate business


This January I quit my job to do real estate investing full-time. Together with partners in the area we buy and sell houses for fast gains and we also hold property for appreciation. In the first part of the year I personally bought 7 houses in 4 different states. It’s not all easy – there is definitely a learning curve. It helps to have experienced associates to help me along.

Now what??

We have a unique opportunity to continue to expand the real estate business. Because of the market reversal in California there is going to be many people in trouble with their loans. People have been buying more home then they can afford or refinancing like crazy. Foreclosures are already on the rise and they are going to sky-rocket in the next several years.

There is an opportunity to 1) help people out of trouble and 2) make some money. Service and integrity comes first though. I know what its like to be behind payments and face foreclosure. I refuse to be a “shark” investor.
It must be win-win, or no deal.

Want to participate?

Do you have money that’s sitting in an account somewhere earning an embarrassing 1-3%? Are you comfortable with your retirment money sitting in a volatile stock-market?

Maybe you’re not investing at all. Are you comfortable trusting social security to take care of your retirement?

Invest your money with us and get 24% fixed return secured by real estate.
We use your money to buy and fix houses improving the area and helping sellers in distress.

Benefits to becoming our private lender:

* we pay fixed 24% interest on your money – reliable returns

* compounded monthly – your interest is making interest and it grows exponentially

* secured by real estate – just like a bank, YOU get a mortgage against our properties to protect your investment

* start with as little as 10,000

* may use your 401K or IRA account – get tax advantages

* your money doubles every 3 years

* 10,000 grows into 100,000 in 10 years

Worst case scenario…

If we can’t pay you back, you get a good property. We only put your money into a house that has at least twice the equity as the amount you’re investing. We only invest into nice properties in good neighborhoods. If something were to happen to our business you can normally just sell the house at a discount and get your money out. What stock or mutual fund is going to give you THAT kind of security?

Limited opportunity…

We can only take a certain number of private lenders. Get back to me soon so I can explain in more detail.

Also please forward this to anybody else who may want to get a high return on their money. We pay referral fees!


I would love to hear from you either way. Lets catch-up!

You can imagine my disbelief in getting this email. Here’s an old acquaintance who I haven’t heard from in years, and he pitches me the shadiest-sounding financial “opportunity” I’ve ever heard of. “Fixed 24% interest on your money – reliable returns”? Oh really? Give me a break. When I read that, I immediately knew this “offer” was BS, but just to play along, I asked him what the risks of his idea were. He replied:

From: Casey Serin
To: Ramit Sethi

1) Getting into a bad deal. Minimize with experience. I’ve been investing full time since Jan of this year and dabbled part time for about a year before. I’ve already made my share of mistakes and learned from them. (Good blogging material!) So I’m still pretty new but not BRAND new. To fill in the gaps in my knowledge I work with other experienced investors who help me and partner on deals with me. That’s the “we” part.

2) Private lender needs his/her money out early. Minimize with having other lenders on stand-by. I would not try to keep a private lender locked-in. If I can find another lender to take their place then I’ll give back the money plus interest without any fees.

3) Seller is afraid we won’t make their payment. Minimize with education.
First of all, most sellers I deal with are about to loose their house and already have 2-5 late payments on their record. They don’t have much to loose, especially since I’ll give them money for their equity. Better then loosing the property, getting a foreclosure and getting no money. Second, if I’m investing 10K+ into a deal why would I not make the payments and loose my investment? I’m catching up their loan, improving their credit and helping them get a fresh start. The seller has much more to gain then they have to loose

Ok, now I knew for sure that this was definitely a scam. I said no thanks and politely passed on the offer.

Here’s where it gets even more interesting. THE VERY NEXT WEEK, I received another email from Casey.

I haven’t told everybody the full story about the recent problems in my real estate business. I feel like I need to share my experience and tell it how it is. So I started a blog:

As I learn my lessons and find solutions I will be writing about it. Hopefully this will help others out there who may be going through the same thing.

Also let me know if you have any buyers for my properties. I’m ready to sell them below what I owe via a shortsale to avoid foreclosure.

Those who received my email about Private Money – please forgive me for giving you a false impression. Getting high returns lending on real estate deals is a good thing – you should do it. However, I didn’t fully explain MY situation. I made it seem like I had everything together. Well, as you can see, I’m not a very safe bet right now. As I recover from this thing and rebuild my business I hope to gain your trust over time. Then if you still want to get great returns we can talk. In the mean time I can refer you to other investors who already have a solid track record.

Thanks for your support.

Now this really made me mad. Casey had tried to sucker people into a scam real-estate deal less than a week before he admitted he was going through foreclosure. I was fortunate enough to recognize his pitch as bullshit, but what if someone had gotten conned into it? Financial scams on unsuspecting people make me furious. So I read through his site. It turns out that he had bought multiple houses in different states (hoping to flip them quickly), lied on his applications to get his loans approved, and had grossly miscalculated how much it would cost to renovate and flip them. Bad move. His debt is now over $2 million.

But this isn’t just a 1-dimensional character who deserves our scorn. I know Casey and he’s actually a very nice and sincere guy. We met at a Starbucks a couple weeks ago (he had been invited to give a talk at UC Berkeley), and he filled me in on the details. If you read through his blog, you’ll see that he’s being completely honest about what he did wrong, and he’s accepting responsibility for his situation–despite the thousands of angry comments on his blog. It seems that there are lots and lots of people angry about the housing bubble, both from the people who made stupid choices and screwed themselves by being greedy and the “I told you so” people.

Things have been going all right for him. He’s managed to sell one of his houses, and his press attention has been sending thousands of people to his blog. In fact, Robert Kiyosaki (author of Rich Dad, Poor Dad, which I reviewed here) heard about Casey’s story and invited him to meet in Phoenix.

Will Casey get out of debt without having to declare bankrupcy? I don’t know. I honestly don’t know what to make of this situation. But I do think a few things: First, Casey really messed up by trying to con people into joining his stupid real-estate “opportunity.” That was a scam, pure and simple, and every single one of you needs to beware of that in the future–no matter if your age-old high-school friend pitches you, or your best friend. A scam is a scam. Second, Casey did at least acknowledge his wrongdoing a few days later and invited people to his blog to view his progress. He’s been remarkably positive despite the horrendously negative comments he’s getting. Even when I met him, he knew exactly the situation he was in, and he was still positive about the future. I think that’s pretty impressive. And I’m pretty amazed by what he’s done in 2 months: He’s created a great blog to share what he did wrong, and he’s gotten massive media attention to spread the word.

Is it really right to be starting a blog when you’re over $2 million in debt? Honestly, I wouldn’t be doing it. I’d be doing every single thing I could to sell those properties and (this may be the only time you ever hear me say this) get a stable job. Sometimes, you need to bite the bullet. But he’s chosen a different path and I guess we’ll see how it goes.

For now, I don’t really have any more conclusions or thoughts. Just check out his blog and see for yourself: (you can start at Why I am Facing Foreclosure).

This is a blog on personal finance and personal entrepreneurship for young people. To see more articles from, check out my table of contents (over 300 posts), my RSS feed, and my newsletter.

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  1. Actually, all the attention he’s getting could actually sell his houses if he promotes them on his site, etc.

    Thanks for sharing your personal insight on this story!

  2. I hadn’t been aware of this situation, but thanks for the post. I have a friend who read a book, and went to a couple seminars, and wants to get into the business. He’s a partner with his dad in payroll (his dad has run the business for 20 or 30 years), and it’s not sexy, and he’s still building his side of the business, but he’s itching for something else, and I’m trying to get him to take a real look at the situation first.

    He’s all down on the risks of the market, and thinks flipping is actually safer. I’m constantly giving him the real facts on investing, and telling him to get his butt some IRA goodness. None of it seems to sink in, though, and the only good side is that it’s harder to start, than do nothing, so he hasn’t gotten himself into any trouble, but hopefully this post and situation will hit home with him some. Thanks Ramit.

  3. What really bothered me was his poor spelling and grammar (for example, he kept using ‘loose’ instead of ‘lose’). How can you trust someone who can’t even write properly?

  4. Won’t Rich Dad just tell him to find renters that will pay his mortgage? Then tell him to use any blog money to pay the CC off and get a day job to invest in gold?

  5. FYI: Prlinkbiz (an employee for Rich Dad’s Wife. I guess that makes her Rich Mom) blogs a little of Casey coming to Rich Dad headquarters:

  6. Oh my god, your old friend is up shit creek. Did you notice he is trying to raffle one of his houses? The poor kid has the wrong mentality… get-rich-quick, pie-in-the-sky type stuff. He actually indicts himself over and over and over and over. I’m not surprised that he thinks that he can pull in $15,000 a month bird-dogging real estate contracts to investors…he doesn’t have a clue about the real world. Not to mention he has that patronizing idea of a man needing to take care of his woman. God this kid needs a reality check. “There is no such thing as a free lunch.” Props to him for being so honest about committing federal crimes. What a douche.

  7. I can’t say i feel bad for your friend because he put himself in his own situation but I think most of the comments on his blog are garbage that shouldn’t be listened to anyway.

    That being said no matter which way this panders out it will be a good lesson on why sensible saving and investing will always win in the long run over shady behavior and lack of character ethic.

  8. He’s been doing this for NINE MONTHS and thinks he has any inkling he knows what he’s doing? No wonder he’s seven figures in the hole. He’s the kind of sucker the earlier movers pray on. Sounds like greed got the best of him. I feel horrible for his poor wife! Hopefully she’s not as screwed as he is.
    This will be a really HARD lesson, and I’m amused that he thinks that after declaring bankruptcy he might just “rebuild” his real estate biz. Dude, you can’t cook! Get out of the kitchen before you start another fire! Stick to programming!

  9. The thing I really don’t get is why on Earth he thought it was a good idea to buy houses in so many different states. I just can’t see the benefit of that, unless it’s to feel important by jet-setting across the country for “business.” He’s also pretty condescending toward the idea of a “cubicle” job…hey dude, some of us work in cublicles and it’s aight. Ramit, I like that although you are an entrepreneur that doesn’t “work for the man,” you don’t act like people who have normal jobs are morons…I appreciate that!

  10. Wow, Ramit, you really do know everyone.

    I fully support the idea of someone blogging about their mistakes. I think that too many bloggers try to portray themselves as “perfect” which you and I know no one is.

    Can’t personally comment on Casey, have never met the guy, but my blog partner seems to feel he’s on the up and up about trying to dig himself out of his hole. And if he blogs about, other people should be able to learn from his experience.