San Diego Housing Bubble News and Analysis

Wow. I realize I should have some pithy, or topical comment, but all I can come up with is: Wow.

"This should turn out well". Yeah, huh?

$12,200 per month in carrying costs! If this guy is struggling now, wait till the full effect of his new monthly burn rate hits.

I hear those Bosa developments are also in the firing line as far as pending latent defect/construction defect lawsuits go as well.

Greed and stupidity are a lethal combination.

Reminds me of my 6th grade honors math teacher. The ones that spends more time surfing then educating, and prove through their own dumb*ss actions, they can't count worth sh*t. Uh, find me someone that's willing to pay $6100/month for rent...I got a bridge to sell them.

"Surf's up, dude"...Doh...

Where are the Hummer and BMW jokes? 

Guess they can always live in the Hummer and surf each day and rent out both overpriced real estate properties.

I betcha thats the dude's next move- live in the Hummer, surf and rent out both properties or face foreclosure.

San Diego might be the last place someone would want one of these.

http://www.youtube.com/watch?v=maa6VM6lZRo

Here's the full article.
I'm waiting for ocrenter to do a feature story on this mortgage broker. Let's follow up on this guy 2 years from now.

http://www.signonsandiego.com/news/busin...

This is my favorite part of the article here:

“Long-term, if you look at the San Diego marketplace, if consumers are waiting for the bubble to outright burst, this is a very controlled, stable market,” he said.

When are these morons going to stop denying the realities of this market?

I too had to do a double take when I read this article in the crappy UT this morning. If I can afford $6,100 a month to rent out an over-priced condo, why would I cover someone else's mortgage payment? I would go out and make payments on my own place, and get the tax deduction to boot. This guy Mike Railey is a class A moron. Please, please someone track this guys progress and let us know when foreclosure proceedings start on either his crown jewel condo or his modest hovel in Del Mar. Porkman

You gotta give the guy some credit, however, for munching on his own cooking. First, he took on a funky neg-am loan, despite presumably understanding how it worked. (God only knows how many of his clients were put in the same type of loan.) Next, he speculated by buying a huge, presumably unaffordable piece of real estate. (God knows how many of his clients were "helped" by him into loans on their own huge unaffordable speculations.) For a guy that probably unwittingly assisted others in unknowingly hobbling their financial futures, at least he had the decency to follow the same path. So here's to you, real man of genius.

Clownifornian Personified.

Let's make a note of the reporter name and in our calendars, so that we can check on this "genius" every six months or so. The reporter probably doesn't know it, but this story has lots of potential!

I feel sorry for Mike's family, but I hope the experience will help his son grow to become a frugal person.

I was amazed reading this- if I had made some clearly dumb financial moves, would I let it be published in the paper- complete with a picture of my wife and kid?

And I suspect that the cost of that condo is more than $6100 a month. Property tax is at least $1300, HOA at least $800, plus insurance.
So less than $4000 a month left to pay the mortgage on a $1.4m place at current jumbo loan rates? No way, unless its a truly funky option arm, but I didn't think they still wrote those. Or he made a major downpayment which-sadly- is at risk.

I wish the guy luck for his family's sake, but I just don't see any way this will work out for him.

Sorry, but I don't wish him any luck at all. Idiots like him need to be washed out of the system completely so that it can normalize again and have a modicum of rationality once more. Yes, it's harsh, but business is like war, you have to play to win and you have to play smart. Survival at times is as important as gaining market share...if you don't survive, then you cannot win later on.

I'm with you betting on fall.
I don't know how he came up with $6100/mo carrying cost.

Purchase Price 1,400,000
Down Payment -
Loan Amount 1,400,000
Interest Rate 7.00%

Monthly Interest 8,167
Prop Tax Rate 1.20%
Prop Tax 1,400
HOA 800
Insurance 100
Maintenance 100

Total 10,567

I don't feel sorry for this guy and his family in the least. They completely deserve what's coming to them.

I'm with you betting on fall.
I don't know how he came up with $6100/mo carrying cost.

He said he had a 15% deposit. Assuming that's his down payment, I come up with about a 4% payment to make it come out to 6100 per month. Assuming 1.125% prop tax and ignoring maintenance.

4% would imply that he has a neg-am option ARM or some other crap, that I thought no longer existed.

I don't feel sorry for the guy or his wife, but I do for his kids. They have to suffer for their fathers greed. It's sortof like a dad running a meth lab. He might think he isn't hurting the kids until he finds out he is poisoning the whole lot of them.

I think the condo deal is a bad trade however his view on real estate is probably based on his home which has got to have gone up substantially in value since purchase in 1996.

http://www.sdlookup.com/Property-A150660...

Here's the patent on the surfboard. At least his condo deal is getting some free PR.

http://www.uspto.gov/web/patents/patog/w...

Let's see... According to property records this guy never made any money flipping houses.

He may have made money in the mortgage business but it certainly didn't go to pay-off his mortgage.

He refinance his Del Mar house numerous times, each time taking out more and more. It looks like the latest notes are:

1/13/2006 WAMU 731,900 first
10/6/2007 WAMU 160,000 2nd

Maybe the money went to the condo downpayment or into the "develpment" cost of the surf board. What a goofy idea. I doubt a motorized surf board will make it. If anything, it's dangerous and will cause injuries and lawsuits.

The condo transaction is not yet available.