How long do you think one should own a property with a 68-70% LTV mortgage (amortized EVERY YEAR of ownership [over 30 years] before they can recover their OWN $$ out of it upon sale?). Suppose they just did minimal improvements over that time, perhaps $10-$25K? Should they expect to be able to recover their initial and subsequent cash investments upon sale?
I know a few others in the same situation as myself. Neither of you have addressed the issue of lender malaise as the cause of this “gross undervaluing” in many areas. It’s gone too far the other way. I understand that what has caused values to tank is that 90% of the properties that are actually closing escrow right now are “distress-sales.” No one else in their right mind would bother even marketing their properties in this climate, even if they WANTED to sell.
Has anyone ever known an owner to LOSE their OWN INVESTMENT in a property bought 12-15 years ago at 78% LTV in SD County when they never refied or took cash out and also improved the property with their own funds?? If so, WHERE was the property and do you think they overpaid for it?
What say Piggs? If you are currently a prospective buyer, do you expect to find an “equity” resale out there (NOT a SS/REO) today where a longtime seller will accept ’99-’02 prices even though they have improved it in the last decade with, say $25-$50K of their OWN MONEY?? We’re talking in SD County, within 5 miles of the coast or bay. Truly, I want to hear your experiences…
sdr, you talk a good game about doubling your “investment” in “Nirvana” over the last 10-12? years. Haven’t you already removed most or all of your equity?? And the fact that you don’t think you will sell in the near future but are banking on “doubling your investment” when you finally decide to sell is suspect. This remains to be seen. The “fat lady” hasn’t finished singing yet and may not be finished for several more years :={
UCGal, you are fortunate in a couple of ways. You did not have a lot of building going on within a 10-mile radius of you in the last decade which was in direct competition with properties like yours and ALL financed with loose lending practices. There isn’t much distress in your zip code. In addition, your tax assessment is protected by Prop 13 for the life of you and/or your children/heirs in the property (if you decide to never sell it). This no doubt eases the pain greatly of your feeling you may have overpaid for your property. Since you paid your parents directly for your property, perhaps you will get some of it back when they pass…it isn’t like it was an arms-length transaction. How would YOU feel if YOU, as a single parent, lost $120K to $140K of your OWN money on a perfectly decent large home in a perfectly decent neighborhood after paying on it religiously for 14 years and never removing equity thru no fault of your own because you “had” to sell it in a fvcked-up market to finally “retire.” It’s not like “insurance” is gonna cover the loss, lol.
Save your pity, Piggs. In my case, it doesn’t matter. I will be able to “retire” anyway, and even retire the mtg, if it becomes necessary. If I keep my current mortgage, a tenant will pay the remaining years off left on it and I will have a few hundred to spare every month for repairs and vacancies. Otherwise, I’ll take the entire rental income every month (minus mgt fee) to supplement my “retirement.” Know any banks paying more than that these days??
SDR, how are YOUR investment properties doing? Are you underwater on any of them?? Do you have any negative cash flow on any of them?? How long have you held them? Do you put downpayments on any of them? If so, how much? When do you expect you can sell them and get out above water and with your downpayments (if any) intact?? Do you think you “deserve” to sell and get your initial investments out or do you really not care because you will depreciate them into the ground, anyway?? When will you finally purchase a home for your family to live in? Nothing wrong with this, but have you just decided to rent for the duration of your minor childrens’ occupancy?? If so, why??
My “story” is not about being “heartbroken.” We all know none of this had to happen. It is “business” plain and simple. There is obviously monetary incentives for these lenders to play this game and they are playing it hard to the ground. In doing so, they are fvcking up every honest property owner’s values within a ten-mile radius or so, depending upon area. I’ve owned several properties in this county in the last 32 years and I have NEVER seen values crater like they have in 2011. I’ve always recovered at least $10K over my purchase price upon sale, even if I just cleaned it up, held it for a few months and put NO improvements in it! YES, in SE SD and South County!!!
I’m sickened by this “lender malaise” and am not alone in my opinions in this regard. These “squat-mod” and “squat-SS” groups are driving free-and-clear late model luxury vehicles with their ATM’d “equity” (which has now “disappeared” down the rabbit hole). Many of these douchebag households own TWO of these vehicles AND various and sundry large “toys,” bought with their former “home equity.” I’m driving a VERY high-mileage 18 yo vehicle that I can’t currently afford to replace. Such is life. No, it’s not fair and never will be.
Why should these groups CARE if their credit is shot for a few years? They have everything they need, incl near new top-quality vehicles and 2% ? mortgages on properties that they will never in their lives “own” again if they now let them go into foreclosure (they couldn’t “qualify” for them in the first place).
Where do Piggs sign up for this “special treatment??
