On page 1 of the business section, at the bottom, a story about a couple who are in over their heads in RE. Seems like the classic story. It amazes me how people with a combined total income of about $60k (if I added it up right) can acquire multiple properties. Now they are going to have to dump most of the properties into a dead market. Funny how the bigger the party, the worse the hangover always is…
It’s the people whose situations were marginal to begin with that will set the market trends. Nobody worries about the RE millionaires because they have enough breathing room to suffer the loss (booked or not) without going under and making it worse. But when a marginal owner has basically no recourse they are compelled to suffer their loss at the worst possible terms.
“The Lebodas bought the home in 2005 with the intention of starting a second home-care business, but it’s being used as personal storage space. It’s also the most expensive property of the bunch, costing them $3,159 a month.”
Wow, that’s an expensive storage space!
The good news for them is even if they take a 10-20% loss of the stated price on the properties, at least they can cover the mortgages. That’s assuming they can find a buyer.
Someone isn’t telling the whole story and I suspect the fin advisor didn’t look closely enough to see the obvious BS.
The primaryhome has 1st, 2nd, and Heloc. $915K on $875K value (probably wishful value thinking)
The 1st and 2nd add to $816K. We’ll get back to this.
The Pinkdawn investment is a $400K with loan of $298K. It’s most expensive at $3159. That math doesn’t add up unless the loan is at 10%. That’s provided you assume taxes are in the $3159 and HOA fees of $300. Without taxes and HOA fess, it requires a rate of around 12.5%
The primary house is worse, that first and second at less than $3159? Means the primary and likely 2nd are both teaser or option ARMed. Combined, they are under a 2% interest rate not including taxes.
.
