I am not trying to sell you anything. Nor am I telling you how to live your life. You'll have to make that ultimate decision for yourself. I can only tell you my story which may or may not be used as a reference point for your own circumstances, fair enough?
My story started around the end of 2007 when it was just nearing the end of the real estate euphoria when everyone could qualify for a loan as long as they had good credit, mine was above 680 at the time. I took a real estate seminar in October of that year about how to invest in foreclosures, more specifically Real Estate Owned (R.E.O) properties that the secondary market such as Fannie Mae and Freddie Mac were listing on their websites. I learned how to acquire these kinds of properties with No Money Down. Now when I use this phrase, DO NOT let it scare you away. This simply means using Other People's Money (O.P.M) to get what you want which was very prevalent at the time. At the seminar, I was given a list of Hard Money Lenders to contact to fund my deals. The H.M.L usually paid for the cost of repairing the house and then you repay the loan after a year or whenever you can refinance, whichever comes first. However, my situation didn't turn out that way. My Hard Money Lender had already had a large inventory of properties that they were selling to anyone who qualified with good credit. I was a Realtor at the time, so I did a Stated No Doc Loan. In essence, even though I wasn't selling any houses as a Realtor at the time, all I had to do was to say that I was making $35,000 a year an I INSTANTLY qualified for an $87,000 mortgage at 9% interest only for a 4 bedroom 2 bath single family investment in Atlanta, Ga. Since this was my first investment property, I was eager to close as soon as possible because I thought I'd be collecting rent from tenants who were already occupying it. The inspectors I asked to look at it were reluctant because it was an investment property with tenants. Those inspectors who did come were unable to complete the job because the tenants complained they were invading their privacy. I ended up closing on the house from a Title Company in New York with $1500 using a 0% APR introductory rate from a credit card. By January 2008, there I was stuck with a $652 a month mortgage payment, an occupied property with no lease, and a couple of squatters who refused to pay rent! Fast forward 2 years- The tenants are evicted, I'm losing my shirt from paying contractors to do cosmetic work for the next tenants who never came thanks to an incompetent property manager, so I decided to Short Sell the house. One good thing I must add- the insurance paid for the roofing. Now I'm the kind of person that will negotiate for myself. My 0% introductory rate on my credit card was running out, I could no longer sustain the mortgage, so I told my lender I can no longer afford to pay for a vacant property. So the lender took a $79,000 loss. I sold the house back to the same finance company I purchased it from for $8,000. Now that took courage! Luckily this was not a traditional lender, so the landing wasn't that rough.
The house was in my L.L.C so I didn't personally get hit, except with my credit cards. When the credit cards came due and I couldn't pay them, my colleagues advised me to declare bankruptcy. I was too proud to do that so I applied to a Debt Settlement Program. This enabled me to prevent bankruptcy while reducing my monthly payout amount. I am now driving a cab and promoting the real estate investment opportunity. It may seem counter intuitive given the nature of my circumstances, however, I view it as a learning experience. There are opportunities out there for people to take advantage of for money, its just not a traditional job that they're used to. People think that they're victimized by society, the economy etc. etc. Its not that way at all in reality! The reality is that people have a CHOICE as to whether they'll take that commission with no salary. There are probably more commission jobs out there right now in the history of this planet! Some times it takes a crisis in your life to happen to enable you to FEEL IN YOUR GUT whats going to work for you.
I just hope that my experience gave you something to think about and that if you DO ever decide to become a real estate investor, that you won't get swayed with what you think is a good deal  like I did 5 years ago, but that you'll at least have a local support system and team of like minded individuals that you see on a regular basis that may more readily point out the red flags to you. Sometimes it pays to be humble, for that forces you to listen! Again the choice is yours to take their suggestions or not. You can almost compare my story with two lovers who split up an heartbroken, wondering if they have enough confidence and courage to start another relationship all over again with someone else. That's how I feel about real estate, and you know something, the next time I take action and invest, for I want to invest again this month, September 2012, it will be with a partner I trust.