Housing News

Top Economists Files Bankruptcy

Theory and practice don’t always go together.

Sometimes, even gurus falter.

The Morning News posted a report last week about an economist’s recent Chapter 7 filing. Jeff Collins, formerly the director of the Center for Business and Economic Research at the University of Arkansas, currently owes $10.28 million, versus his current assets worth only $243,314. Collins admitted to have invested in a real estate deal that never allowed him to recover his capital and maintenance expenses in apartments. It was all a matter of very high vacancy rates.

The report adds, “… The filing indicated Collins plans to surrender a 2006 Ford Mustang GT Coupe to First Western Bank, and a single family home at 2527 Frontier Elm Dr. in Fayetteville to Wells Fargo Home Mortgage. He said he has already sold or surrendered most of the apartment buildings owned by Campus Properties to satisfy debts.”

It’s ironic that this has happened to Collins. We’ve archived a 2005 research report that his office conducted. He announced, “… We track the real estate market in Benton and Washington counties, and I can tell you there are pockets of apparent oversupply” in commercial and residential real estate. That’s because people develop in areas of business they know, such as real estate, and some people think they can make money in development without doing any homework.”

Well, looks like somebody actually forgot to do his homework.

But we can’t blame Collins completely. It was 2005 and the real estate boom was at its advent. He may have done a lot of investment research before putting his capital up – but he was eventually caught up by the downturn.

Theory and practice don’t always go together.

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