Orphan subdivisions are a topic that Clark spoke about frequently in the late 1980s and early 1990s. Now there's reason to be concerned about them again. Throughout most of the country, developers buy up land and put in streets and utilities before selling off to builders or developing new homes themselves. People often wanted to be early buyers in these burgeoning developments when the housing market was going strong because they could get better deals. But now the danger is that builders are going broke and abandoning developments midstream. Clark's fond of saying that you should only live in a swim or tennis community if you can swim in the pool and play tennis on the courts. Anybody can woo you with a four-color brochure that has pictures of a pool, a clubhouse, and other amenities that are supposed to be built. But it's all smoke and mirrors until you see it for yourself.

These orphan subdivisions will be a problem especially in the South and West as developers go insolvent and dump their projects. Nothing good comes of it even when the lenders come in and take over. Lenders really aren't in the real estate development business. One of the worst scenarios that Clark has seen involved a large development of more than 1,000 high-end home that were two-thirds of the way built when the builder went belly up. The insurance company that took over sold the land to the highest bidder, who in turn built townhouses and starter homes. That made the home values of the existing owners plummet. Now imagine the lender can't find anyone to step in at all. You could be living next to scarred earth that's been homogenized for development and looks awful. So Clark has a simple rule when it comes to orphan subdivisions: Buy at the tail end of a build, never at the start of a development. Don't be a speculator -- unless you get an absolutely phenomenal deal.