ouch $9,800/month negative cash flow

[fendter619]

A friend of mine has been an avid real estate speculator for the past 4 years. I just talked to him a couple of days ago and he confided that he has a $9,800/month negative cash flow. He and his girlfriend had purchased 8 properties through various sources including Marshall Reddick seminars.

He also confided that they are living of their credit cards and his income has substantially gone down since he is a Mortgage Broker. Surprise, surprise.

What flabbergasted me is that he still thinks that they can manage to stay in the game and avoid foreclosures/BK. Honestly, I don’t see how. His savings of about $150k can dwindle mighty fast with this kind of negative cashflow.

All I can say is: ouch.

[patientlywaiting]

He’s hoping for a Spring 2008 rebound.

Those perma-bulls will get burned real bad and deservedly so.

[4plexowner]

and will have used up their savings before the final crash and burn

“not a pot to piss in” – that will be an apt description of many housing speculators in the next few years

[jimmyle]

My wife’s coworker and his realtor wife refinanced their house and bought three new houses in 2005 (two in Chula Vista and one in Temecula). This guy retired from the Navy civilian job in 2006. Now he is back to work as a temperary employee for the Navy (while receiving his pension) to keep up with the four mortgages.

[jimmyle]

My wife’s coworker and his realtor wife refinanced their house and bought three new houses in 2005 (two in Chula Vista and one in Temecula). This guy retired from the Navy civilian job in 2006. Now he is back to work as a temperary employee for the Navy (while receiving his pension) to keep up with the four mortgages.

[jimmyle]

My wife’s coworker and his realtor wife refinanced their house and bought three new houses in 2005 (two in Chula Vista and one in Temecula). This guy retired from the Navy civilian job in 2006. Now he is back to work as a temperary employee for the Navy (while receiving his pension) to keep up with the four mortgages.

[jimmyle]

My wife’s coworker and his realtor wife refinanced their house and bought three new houses in 2005 (two in Chula Vista and one in Temecula). This guy retired from the Navy civilian job in 2006. Now he is back to work as a temperary employee for the Navy (while receiving his pension) to keep up with the four mortgages.

[4plexowner]

and will have used up their savings before the final crash and burn

“not a pot to piss in” – that will be an apt description of many housing speculators in the next few years

[4plexowner]

and will have used up their savings before the final crash and burn

“not a pot to piss in” – that will be an apt description of many housing speculators in the next few years

[4plexowner]

and will have used up their savings before the final crash and burn

“not a pot to piss in” – that will be an apt description of many housing speculators in the next few years

[patientlywaiting]

He’s hoping for a Spring 2008 rebound.

Those perma-bulls will get burned real bad and deservedly so.

[patientlywaiting]

He’s hoping for a Spring 2008 rebound.

Those perma-bulls will get burned real bad and deservedly so.

[patientlywaiting]

He’s hoping for a Spring 2008 rebound.

Those perma-bulls will get burned real bad and deservedly so.

[snail]

why using CC when he is still have 150K in the bank?

[justbought]

cash out and go bankrupt

[justbought]

cash out and go bankrupt

[justbought]

cash out and go bankrupt

[justbought]

cash out and go bankrupt

[Raybyrnes]

Why would you use anything other than CC? Money in the bank, he can make payments. He is buying time. Additionally as his credit is still good he can get good rates on the CC’s.

Worst case scenario is that he go BK and theis is forgiven.

Best case is that he rides it out and things turn in time for him to sell property at a profit and pay the cc off.

[lendingbubblecontinues]

Your friend sounds like a real dumbass.

[lendingbubblecontinues]

Your friend sounds like a real dumbass.

[lendingbubblecontinues]

Your friend sounds like a real dumbass.

[lendingbubblecontinues]

Your friend sounds like a real dumbass.

[Raybyrnes]

Why would you use anything other than CC? Money in the bank, he can make payments. He is buying time. Additionally as his credit is still good he can get good rates on the CC’s.

Worst case scenario is that he go BK and theis is forgiven.

Best case is that he rides it out and things turn in time for him to sell property at a profit and pay the cc off.

[Raybyrnes]

Why would you use anything other than CC? Money in the bank, he can make payments. He is buying time. Additionally as his credit is still good he can get good rates on the CC’s.

Worst case scenario is that he go BK and theis is forgiven.

Best case is that he rides it out and things turn in time for him to sell property at a profit and pay the cc off.

[Raybyrnes]

Why would you use anything other than CC? Money in the bank, he can make payments. He is buying time. Additionally as his credit is still good he can get good rates on the CC’s.

Worst case scenario is that he go BK and theis is forgiven.

Best case is that he rides it out and things turn in time for him to sell property at a profit and pay the cc off.

[snail]

why using CC when he is still have 150K in the bank?

[snail]

why using CC when he is still have 150K in the bank?

[snail]

why using CC when he is still have 150K in the bank?

[surveyor]

Owwie

I would say that the day he gives up and starts selling his properties just to get rid of them is probably when you can call “bottom”.

[Ex-SD]

Your friend is S.O.L.
He is the epitome of a F.B.

[patientlywaiting]

I’m no expert but I hear that since CC debts are no longer dischargable in bankruptcy, people are now defaulting on their mortgages instead.

http://www.bloomberg.com/apps/news?pid=20601109&sid=ar909uO1CqHw&refer

[patientlywaiting]

New York Times
A Real Estate Speculator Goes From Boom to Bust

At 32, with just one semester of community college, he owned a BMW, a Corvette and a 5,000-square-foot house worth $1.2 million. He was a creation of the boom. “I was on top of the world,” Mr. Haupt said recently.

Then, last May, the real estate market stopped booming.

Now Mr. Haupt’s house is in the hands of his creditors, as are the cars, three small office buildings and 89 lots he bought in a subdivision in neighboring Lincoln County.

http://www.nytimes.com/2007/11/09/us/09speculate.html?_r=1&oref=slogin

[JWM in SD]

“At 32, with just one semester of community college, he owned a BMW, a Corvette and a 5,000-square-foot house worth $1.2 million. He was a creation of the boom. “I was on top of the world,” Mr. Haupt said recently.”

What a freaking moron. Did you catch the quote from about how was he “…supposed to know…”. It’s called having a brain and an education…not 1 semester of community college at age 32. That doesn’t cut it.

[davelj]

I don’t view this guy’s problems as a lack of formal education, but rather very poor business judgment, which tends to be liberally distributed across the spectrum of educational attainment.

Alan Greenspan has a PhD. Mr. Haupt has 1 semester of community college. Who’s wrought more damage? That’s a rhetorical question.

Formal education is extremely over-rated where success in business or otherwise is concerned. That’s coming from someone who has two masters’ degrees.

[Coronita]

I don't view this guy's problems as a lack of formal education, but rather very poor business judgment, which tends to be liberally distributed across the spectrum of educational attainment.

Smart people make dumb decisions. Dumb people make smart decisions.

 

I do rememeber the marshal reddick seminars. If I recall, reddick teaches at SDSU (or is affliated). I recall he was the empitome of overextending. I know a lot of people who followed him. I hope they are ok.

 

$9800/month negative is crazy. As far as bankruptcy rules. Latest bankruptcy rules don't allow you to completely wipe out debt. 

[Mr_Brightside]

If he’s bought these properties in the last four years and has only $150K in cash he probably already has a negative net worth.

[VoZangre]

The Physics of WORK

seems speculation is a way
of earning without actual work…so..
when people go belly I simply could NOT care less.

NOT one jot, or joule.

“Definition: Power is the time rate of doing work or, the amount of work done per second. ”

[VoZangre]

The Physics of WORK

seems speculation is a way
of earning without actual work…so..
when people go belly I simply could NOT care less.

NOT one jot, or joule.

“Definition: Power is the time rate of doing work or, the amount of work done per second. ”

[VoZangre]

The Physics of WORK

seems speculation is a way
of earning without actual work…so..
when people go belly I simply could NOT care less.

NOT one jot, or joule.

“Definition: Power is the time rate of doing work or, the amount of work done per second. ”

[VoZangre]

The Physics of WORK

seems speculation is a way
of earning without actual work…so..
when people go belly I simply could NOT care less.

NOT one jot, or joule.

“Definition: Power is the time rate of doing work or, the amount of work done per second. ”

[Mr_Brightside]

If he’s bought these properties in the last four years and has only $150K in cash he probably already has a negative net worth.

[Mr_Brightside]

If he’s bought these properties in the last four years and has only $150K in cash he probably already has a negative net worth.

[Mr_Brightside]

If he’s bought these properties in the last four years and has only $150K in cash he probably already has a negative net worth.

[Coronita]

I don't view this guy's problems as a lack of formal education, but rather very poor business judgment, which tends to be liberally distributed across the spectrum of educational attainment.

Smart people make dumb decisions. Dumb people make smart decisions.

 

I do rememeber the marshal reddick seminars. If I recall, reddick teaches at SDSU (or is affliated). I recall he was the empitome of overextending. I know a lot of people who followed him. I hope they are ok.

 

$9800/month negative is crazy. As far as bankruptcy rules. Latest bankruptcy rules don't allow you to completely wipe out debt. 

[Coronita]

I don't view this guy's problems as a lack of formal education, but rather very poor business judgment, which tends to be liberally distributed across the spectrum of educational attainment.

Smart people make dumb decisions. Dumb people make smart decisions.

 

I do rememeber the marshal reddick seminars. If I recall, reddick teaches at SDSU (or is affliated). I recall he was the empitome of overextending. I know a lot of people who followed him. I hope they are ok.

 

$9800/month negative is crazy. As far as bankruptcy rules. Latest bankruptcy rules don't allow you to completely wipe out debt. 

[Coronita]

I don't view this guy's problems as a lack of formal education, but rather very poor business judgment, which tends to be liberally distributed across the spectrum of educational attainment.

Smart people make dumb decisions. Dumb people make smart decisions.

 

I do rememeber the marshal reddick seminars. If I recall, reddick teaches at SDSU (or is affliated). I recall he was the empitome of overextending. I know a lot of people who followed him. I hope they are ok.

 

$9800/month negative is crazy. As far as bankruptcy rules. Latest bankruptcy rules don't allow you to completely wipe out debt. 

[davelj]

I don’t view this guy’s problems as a lack of formal education, but rather very poor business judgment, which tends to be liberally distributed across the spectrum of educational attainment.

Alan Greenspan has a PhD. Mr. Haupt has 1 semester of community college. Who’s wrought more damage? That’s a rhetorical question.

Formal education is extremely over-rated where success in business or otherwise is concerned. That’s coming from someone who has two masters’ degrees.

[davelj]

I don’t view this guy’s problems as a lack of formal education, but rather very poor business judgment, which tends to be liberally distributed across the spectrum of educational attainment.

Alan Greenspan has a PhD. Mr. Haupt has 1 semester of community college. Who’s wrought more damage? That’s a rhetorical question.

Formal education is extremely over-rated where success in business or otherwise is concerned. That’s coming from someone who has two masters’ degrees.

[davelj]

I don’t view this guy’s problems as a lack of formal education, but rather very poor business judgment, which tends to be liberally distributed across the spectrum of educational attainment.

Alan Greenspan has a PhD. Mr. Haupt has 1 semester of community college. Who’s wrought more damage? That’s a rhetorical question.

Formal education is extremely over-rated where success in business or otherwise is concerned. That’s coming from someone who has two masters’ degrees.

[JWM in SD]

“At 32, with just one semester of community college, he owned a BMW, a Corvette and a 5,000-square-foot house worth $1.2 million. He was a creation of the boom. “I was on top of the world,” Mr. Haupt said recently.”

What a freaking moron. Did you catch the quote from about how was he “…supposed to know…”. It’s called having a brain and an education…not 1 semester of community college at age 32. That doesn’t cut it.

[JWM in SD]

“At 32, with just one semester of community college, he owned a BMW, a Corvette and a 5,000-square-foot house worth $1.2 million. He was a creation of the boom. “I was on top of the world,” Mr. Haupt said recently.”

What a freaking moron. Did you catch the quote from about how was he “…supposed to know…”. It’s called having a brain and an education…not 1 semester of community college at age 32. That doesn’t cut it.

[JWM in SD]

“At 32, with just one semester of community college, he owned a BMW, a Corvette and a 5,000-square-foot house worth $1.2 million. He was a creation of the boom. “I was on top of the world,” Mr. Haupt said recently.”

What a freaking moron. Did you catch the quote from about how was he “…supposed to know…”. It’s called having a brain and an education…not 1 semester of community college at age 32. That doesn’t cut it.

[patientlywaiting]

New York Times
A Real Estate Speculator Goes From Boom to Bust

At 32, with just one semester of community college, he owned a BMW, a Corvette and a 5,000-square-foot house worth $1.2 million. He was a creation of the boom. “I was on top of the world,” Mr. Haupt said recently.

Then, last May, the real estate market stopped booming.

Now Mr. Haupt’s house is in the hands of his creditors, as are the cars, three small office buildings and 89 lots he bought in a subdivision in neighboring Lincoln County.

http://www.nytimes.com/2007/11/09/us/09speculate.html?_r=1&oref=slogin

[patientlywaiting]

New York Times
A Real Estate Speculator Goes From Boom to Bust

At 32, with just one semester of community college, he owned a BMW, a Corvette and a 5,000-square-foot house worth $1.2 million. He was a creation of the boom. “I was on top of the world,” Mr. Haupt said recently.

Then, last May, the real estate market stopped booming.

Now Mr. Haupt’s house is in the hands of his creditors, as are the cars, three small office buildings and 89 lots he bought in a subdivision in neighboring Lincoln County.

http://www.nytimes.com/2007/11/09/us/09speculate.html?_r=1&oref=slogin

[patientlywaiting]

New York Times
A Real Estate Speculator Goes From Boom to Bust

At 32, with just one semester of community college, he owned a BMW, a Corvette and a 5,000-square-foot house worth $1.2 million. He was a creation of the boom. “I was on top of the world,” Mr. Haupt said recently.

Then, last May, the real estate market stopped booming.

Now Mr. Haupt’s house is in the hands of his creditors, as are the cars, three small office buildings and 89 lots he bought in a subdivision in neighboring Lincoln County.

http://www.nytimes.com/2007/11/09/us/09speculate.html?_r=1&oref=slogin

[patientlywaiting]

I’m no expert but I hear that since CC debts are no longer dischargable in bankruptcy, people are now defaulting on their mortgages instead.

http://www.bloomberg.com/apps/news?pid=20601109&sid=ar909uO1CqHw&refer

[patientlywaiting]

I’m no expert but I hear that since CC debts are no longer dischargable in bankruptcy, people are now defaulting on their mortgages instead.

http://www.bloomberg.com/apps/news?pid=20601109&sid=ar909uO1CqHw&refer

[patientlywaiting]

I’m no expert but I hear that since CC debts are no longer dischargable in bankruptcy, people are now defaulting on their mortgages instead.

http://www.bloomberg.com/apps/news?pid=20601109&sid=ar909uO1CqHw&refer

[Ex-SD]

Your friend is S.O.L.
He is the epitome of a F.B.

[Ex-SD]

Your friend is S.O.L.
He is the epitome of a F.B.

[Ex-SD]

Your friend is S.O.L.
He is the epitome of a F.B.

[ucodegen]

I would say that the day he gives up and starts selling his properties just to get rid of them is probably when you can call “bottom”.

Nawww.. because some knife catcher is will try to pick them up.. (greater fool theory). It will be hard to tell who the last and greatest fool is.. because somewhere in there, some of the smart patient ones will be picking up the properties. I would look at debt income ratios and monthly payment burdens.

[ucodegen]

I would say that the day he gives up and starts selling his properties just to get rid of them is probably when you can call “bottom”.

Nawww.. because some knife catcher is will try to pick them up.. (greater fool theory). It will be hard to tell who the last and greatest fool is.. because somewhere in there, some of the smart patient ones will be picking up the properties. I would look at debt income ratios and monthly payment burdens.

[ucodegen]

I would say that the day he gives up and starts selling his properties just to get rid of them is probably when you can call “bottom”.

Nawww.. because some knife catcher is will try to pick them up.. (greater fool theory). It will be hard to tell who the last and greatest fool is.. because somewhere in there, some of the smart patient ones will be picking up the properties. I would look at debt income ratios and monthly payment burdens.

[ucodegen]

I would say that the day he gives up and starts selling his properties just to get rid of them is probably when you can call “bottom”.

Nawww.. because some knife catcher is will try to pick them up.. (greater fool theory). It will be hard to tell who the last and greatest fool is.. because somewhere in there, some of the smart patient ones will be picking up the properties. I would look at debt income ratios and monthly payment burdens.

[surveyor]

Owwie

I would say that the day he gives up and starts selling his properties just to get rid of them is probably when you can call “bottom”.

[surveyor]

Owwie

I would say that the day he gives up and starts selling his properties just to get rid of them is probably when you can call “bottom”.

[surveyor]

Owwie

I would say that the day he gives up and starts selling his properties just to get rid of them is probably when you can call “bottom”.

[jficquette]

I hope his girlfriend is good looking.

John

[jficquette]

I hope his girlfriend is good looking.

John

[jficquette]

I hope his girlfriend is good looking.

John

[jficquette]

I hope his girlfriend is good looking.

John

[patientrenter]

I think many of these now overextended young people with apparently limited career prospects who became no-money-down buyers of multiple properties were doing a very smart thing. Dumb lenders allowed them to buy valuable options on house prices for free, or for very little. All they had to lose was a few years’ worth of good credit. Not a big price to pay for someone with no money and limited prospects.

Let’s say the monetary value of poor credit for a few years for such a person is $20,000. That’s their downside. If they bought 8 properties worth $300K each, and the properties went up by 50% over 3 years (not unusual in recent times) they probably netted almost a million. No one could know the future, and the gamble for recent buyers is turning out badly, but it was a gamble heavily loaded in favor of the ‘dumb’ buyer.

Patient renter in OC

[Fearful]

There are all degrees of speculator. The house I rent is owned by a nice guy, a physician who moved with his family to Chicago. I calculated the numbers on this place and reckon he is absorbing $1,400 a month negative cash flow. Ouch.

[sandiego]

Well, based on where prices are trending, everyone who owns a house in California (me included) is losing more than $1,400 a month ($17,200 a year) on homes that they actually occupy.

[sdrealtor]

How can I lose money I never had?

[sandiego]

If you actually put a 10-20% down payment, you are losing it on a daily basis.

[patientlywaiting]

You’re also losing money if you have to work to pay back a loan that you could have avoided by not buying at the wrong time.

[fendter619]

Somebody above stated that my friend should just sell. I think he would if he could. The problem is that all 8 properties are to various degrees under water (between 30k-100k/property). If you multiply that by 8 properties you have a negative net worth of around $400k.

I personally believe he is keeping the $150K to feed the monster and the CCs to live off.

I seriously think that he is more than your average FB.

Even a BK won’t wipe his slate clean due to the new law changes. Also, most of his properties had been refied more than once. Doesn’t that mean that these loans became full recourse loans? They now can come after him for everything he owns.

He was talking about short selling one or two of his properties, but the bank told him that he needed to be behind on his payments first. Well guess what: the minute you get behind on your house payments the CC companies will raise their interest rates to the maximum under CA law. I think it is around 22-24%. There goes the theory of living of the CCs for a while.

I think no matter which way you spin his situation it doesn’t look good.

Maybe time to seriously looking into living in Costa Rica for the foreseeable future.

[Mr_Brightside]

I would not throw that $150K of good money after the bad money that’s already lost. Not sure how to pull that off but I’d rather have eight short sales going that are heading for foreclosure now that after I lost all my cash.

[drunkle]

what would happen if he took his 150 and bought another home. one that is at current, cheaper prices, something like a condo in a heavily depressed area (np, mission valley, murrieta, etc). move into it and let everything else go (cc debt, investment props, etc). keep little to nothing, let it all go to repayment. negotiate a manageable repayment schedule for the rest and work for a living.

[Coronita]

what would happen if he took his 150 and bought another home. one that is at current, cheaper prices, something like a condo in a heavily depressed area (np, mission valley, murrieta, etc). move into it and let everything else go (cc debt, investment props, etc). keep little to nothing, let it all go to repayment. negotiate a manageable repayment schedule for the rest and work for a living.

I don't think he won't be able to qualify for another loan, especially these days. I wonder if the problem is that he can't find renters. If so,  I wonder if it would make sense to try to rent some homes as Section 8 housing. Don't know the exact details, but just brainstorming off the top of my head. 

If he's headed for BK/foreclosure, I'd take the $150k and hide it somewhere with a trusted person, max out all CC's with cash advances and hide that somewhere. 

One thing for sure. If he and his girlfriend are still together after this mess, I have to say that girl is definitely a keeper.

 

[drunkle]

flu:

i was wondering about buying another house as a means of protecting his cash against seizure… use the whole thing to buy outright or as a downpayment should someone lend him the rest…

i think it’d be a lot harder to simply make that kind of money “disappear”… pretty sure cc fraud is also a serious offense…

[NotCranky]

Don’t employers do credit checks to see if a person might have issues that affect employ-ability? Isn’t excessive debt or signs of instability on a credit report a reason not to hire someone for many types of jobs?

[ocean]

Not gonna get a short sale approved with a free and clear condo…..unless he is filling to go way out on the hook and state under penalty of perjury that he has no assets.Sounds a little risky to me.

[unbiasedobserver]

My landlord owns around 10 properties in SD and Vegas. A few years ago she was adament about never selling any of them, blah blah blah. It’s easy to say that when they’re all appriciating. Lately when I talk to her she seems really down, almost depressed and has mentioned wanting to sell some of them. I suspect she is highly leveraged and used equity from his first ones to buy the rest, and now realizes her equity is disappering rapidly.

[unbiasedobserver]

My landlord owns around 10 properties in SD and Vegas. A few years ago she was adament about never selling any of them, blah blah blah. It’s easy to say that when they’re all appriciating. Lately when I talk to her she seems really down, almost depressed and has mentioned wanting to sell some of them. I suspect she is highly leveraged and used equity from his first ones to buy the rest, and now realizes her equity is disappering rapidly.

[unbiasedobserver]

My landlord owns around 10 properties in SD and Vegas. A few years ago she was adament about never selling any of them, blah blah blah. It’s easy to say that when they’re all appriciating. Lately when I talk to her she seems really down, almost depressed and has mentioned wanting to sell some of them. I suspect she is highly leveraged and used equity from his first ones to buy the rest, and now realizes her equity is disappering rapidly.

[unbiasedobserver]

My landlord owns around 10 properties in SD and Vegas. A few years ago she was adament about never selling any of them, blah blah blah. It’s easy to say that when they’re all appriciating. Lately when I talk to her she seems really down, almost depressed and has mentioned wanting to sell some of them. I suspect she is highly leveraged and used equity from his first ones to buy the rest, and now realizes her equity is disappering rapidly.

[ocean]

Not gonna get a short sale approved with a free and clear condo…..unless he is filling to go way out on the hook and state under penalty of perjury that he has no assets.Sounds a little risky to me.

[ocean]

Not gonna get a short sale approved with a free and clear condo…..unless he is filling to go way out on the hook and state under penalty of perjury that he has no assets.Sounds a little risky to me.

[ocean]

Not gonna get a short sale approved with a free and clear condo…..unless he is filling to go way out on the hook and state under penalty of perjury that he has no assets.Sounds a little risky to me.

[NotCranky]

Don’t employers do credit checks to see if a person might have issues that affect employ-ability? Isn’t excessive debt or signs of instability on a credit report a reason not to hire someone for many types of jobs?

[NotCranky]

Don’t employers do credit checks to see if a person might have issues that affect employ-ability? Isn’t excessive debt or signs of instability on a credit report a reason not to hire someone for many types of jobs?

[NotCranky]

Don’t employers do credit checks to see if a person might have issues that affect employ-ability? Isn’t excessive debt or signs of instability on a credit report a reason not to hire someone for many types of jobs?

[drunkle]

flu:

i was wondering about buying another house as a means of protecting his cash against seizure… use the whole thing to buy outright or as a downpayment should someone lend him the rest…

i think it’d be a lot harder to simply make that kind of money “disappear”… pretty sure cc fraud is also a serious offense…

[drunkle]

flu:

i was wondering about buying another house as a means of protecting his cash against seizure… use the whole thing to buy outright or as a downpayment should someone lend him the rest…

i think it’d be a lot harder to simply make that kind of money “disappear”… pretty sure cc fraud is also a serious offense…

[drunkle]

flu:

i was wondering about buying another house as a means of protecting his cash against seizure… use the whole thing to buy outright or as a downpayment should someone lend him the rest…

i think it’d be a lot harder to simply make that kind of money “disappear”… pretty sure cc fraud is also a serious offense…

[Coronita]

what would happen if he took his 150 and bought another home. one that is at current, cheaper prices, something like a condo in a heavily depressed area (np, mission valley, murrieta, etc). move into it and let everything else go (cc debt, investment props, etc). keep little to nothing, let it all go to repayment. negotiate a manageable repayment schedule for the rest and work for a living.

I don't think he won't be able to qualify for another loan, especially these days. I wonder if the problem is that he can't find renters. If so,  I wonder if it would make sense to try to rent some homes as Section 8 housing. Don't know the exact details, but just brainstorming off the top of my head. 

If he's headed for BK/foreclosure, I'd take the $150k and hide it somewhere with a trusted person, max out all CC's with cash advances and hide that somewhere. 

One thing for sure. If he and his girlfriend are still together after this mess, I have to say that girl is definitely a keeper.

 

[Coronita]

what would happen if he took his 150 and bought another home. one that is at current, cheaper prices, something like a condo in a heavily depressed area (np, mission valley, murrieta, etc). move into it and let everything else go (cc debt, investment props, etc). keep little to nothing, let it all go to repayment. negotiate a manageable repayment schedule for the rest and work for a living.

I don't think he won't be able to qualify for another loan, especially these days. I wonder if the problem is that he can't find renters. If so,  I wonder if it would make sense to try to rent some homes as Section 8 housing. Don't know the exact details, but just brainstorming off the top of my head. 

If he's headed for BK/foreclosure, I'd take the $150k and hide it somewhere with a trusted person, max out all CC's with cash advances and hide that somewhere. 

One thing for sure. If he and his girlfriend are still together after this mess, I have to say that girl is definitely a keeper.

 

[Coronita]

what would happen if he took his 150 and bought another home. one that is at current, cheaper prices, something like a condo in a heavily depressed area (np, mission valley, murrieta, etc). move into it and let everything else go (cc debt, investment props, etc). keep little to nothing, let it all go to repayment. negotiate a manageable repayment schedule for the rest and work for a living.

I don't think he won't be able to qualify for another loan, especially these days. I wonder if the problem is that he can't find renters. If so,  I wonder if it would make sense to try to rent some homes as Section 8 housing. Don't know the exact details, but just brainstorming off the top of my head. 

If he's headed for BK/foreclosure, I'd take the $150k and hide it somewhere with a trusted person, max out all CC's with cash advances and hide that somewhere. 

One thing for sure. If he and his girlfriend are still together after this mess, I have to say that girl is definitely a keeper.

 

[drunkle]

what would happen if he took his 150 and bought another home. one that is at current, cheaper prices, something like a condo in a heavily depressed area (np, mission valley, murrieta, etc). move into it and let everything else go (cc debt, investment props, etc). keep little to nothing, let it all go to repayment. negotiate a manageable repayment schedule for the rest and work for a living.

[drunkle]

what would happen if he took his 150 and bought another home. one that is at current, cheaper prices, something like a condo in a heavily depressed area (np, mission valley, murrieta, etc). move into it and let everything else go (cc debt, investment props, etc). keep little to nothing, let it all go to repayment. negotiate a manageable repayment schedule for the rest and work for a living.

[drunkle]

what would happen if he took his 150 and bought another home. one that is at current, cheaper prices, something like a condo in a heavily depressed area (np, mission valley, murrieta, etc). move into it and let everything else go (cc debt, investment props, etc). keep little to nothing, let it all go to repayment. negotiate a manageable repayment schedule for the rest and work for a living.

[Mr_Brightside]

I would not throw that $150K of good money after the bad money that’s already lost. Not sure how to pull that off but I’d rather have eight short sales going that are heading for foreclosure now that after I lost all my cash.

[Mr_Brightside]

I would not throw that $150K of good money after the bad money that’s already lost. Not sure how to pull that off but I’d rather have eight short sales going that are heading for foreclosure now that after I lost all my cash.

[Mr_Brightside]

I would not throw that $150K of good money after the bad money that’s already lost. Not sure how to pull that off but I’d rather have eight short sales going that are heading for foreclosure now that after I lost all my cash.

[fendter619]

Somebody above stated that my friend should just sell. I think he would if he could. The problem is that all 8 properties are to various degrees under water (between 30k-100k/property). If you multiply that by 8 properties you have a negative net worth of around $400k.

I personally believe he is keeping the $150K to feed the monster and the CCs to live off.

I seriously think that he is more than your average FB.

Even a BK won’t wipe his slate clean due to the new law changes. Also, most of his properties had been refied more than once. Doesn’t that mean that these loans became full recourse loans? They now can come after him for everything he owns.

He was talking about short selling one or two of his properties, but the bank told him that he needed to be behind on his payments first. Well guess what: the minute you get behind on your house payments the CC companies will raise their interest rates to the maximum under CA law. I think it is around 22-24%. There goes the theory of living of the CCs for a while.

I think no matter which way you spin his situation it doesn’t look good.

Maybe time to seriously looking into living in Costa Rica for the foreseeable future.

[fendter619]

Somebody above stated that my friend should just sell. I think he would if he could. The problem is that all 8 properties are to various degrees under water (between 30k-100k/property). If you multiply that by 8 properties you have a negative net worth of around $400k.

I personally believe he is keeping the $150K to feed the monster and the CCs to live off.

I seriously think that he is more than your average FB.

Even a BK won’t wipe his slate clean due to the new law changes. Also, most of his properties had been refied more than once. Doesn’t that mean that these loans became full recourse loans? They now can come after him for everything he owns.

He was talking about short selling one or two of his properties, but the bank told him that he needed to be behind on his payments first. Well guess what: the minute you get behind on your house payments the CC companies will raise their interest rates to the maximum under CA law. I think it is around 22-24%. There goes the theory of living of the CCs for a while.

I think no matter which way you spin his situation it doesn’t look good.

Maybe time to seriously looking into living in Costa Rica for the foreseeable future.

[fendter619]

Somebody above stated that my friend should just sell. I think he would if he could. The problem is that all 8 properties are to various degrees under water (between 30k-100k/property). If you multiply that by 8 properties you have a negative net worth of around $400k.

I personally believe he is keeping the $150K to feed the monster and the CCs to live off.

I seriously think that he is more than your average FB.

Even a BK won’t wipe his slate clean due to the new law changes. Also, most of his properties had been refied more than once. Doesn’t that mean that these loans became full recourse loans? They now can come after him for everything he owns.

He was talking about short selling one or two of his properties, but the bank told him that he needed to be behind on his payments first. Well guess what: the minute you get behind on your house payments the CC companies will raise their interest rates to the maximum under CA law. I think it is around 22-24%. There goes the theory of living of the CCs for a while.

I think no matter which way you spin his situation it doesn’t look good.

Maybe time to seriously looking into living in Costa Rica for the foreseeable future.

[patientlywaiting]

You’re also losing money if you have to work to pay back a loan that you could have avoided by not buying at the wrong time.

[patientlywaiting]

You’re also losing money if you have to work to pay back a loan that you could have avoided by not buying at the wrong time.

[patientlywaiting]

You’re also losing money if you have to work to pay back a loan that you could have avoided by not buying at the wrong time.

[sandiego]

If you actually put a 10-20% down payment, you are losing it on a daily basis.

[sandiego]

If you actually put a 10-20% down payment, you are losing it on a daily basis.

[sandiego]

If you actually put a 10-20% down payment, you are losing it on a daily basis.

[sdrealtor]

How can I lose money I never had?

[sdrealtor]

How can I lose money I never had?

[sdrealtor]

How can I lose money I never had?

[sdrealtor]

sandiego’s statement was “everyone who owns a house in California (me included) is losing more than $1,400 a month ($17,200 a year) on homes that they actually occupy.”

I bought my house about 10 years ago. Its worth alot more than I paid for it and always will be. If something were to happen that made it worth less than i paid it wouldnt bother me in the least. I have no desire to sell it and probably never will. As a rental it would be cash flow positive in big way even today.

Now unless I’m not “everyone”, please explain to me how I’ve lost money?

[Fearful]

I bought my house about 10 years ago. Its worth alot more than I paid for it and always will be. If something were to happen that made it worth less than i paid it wouldnt bother me in the least. I have no desire to sell it and probably never will. As a rental it would be cash flow positive in big way even today.

Now unless I’m not “everyone”, please explain to me how I’ve lost money?

You have lost money because you could have sold for more earlier. Your house has dropped in value, and as long as selling it was an option, that drop in value was a real cost to you.

And only considering the payment means you are ignoring the opportunity cost of money. The monthly cost of your house is cash flow out plus the earning you could have gotten from the capital. For example, the payment on my house in San Jose was about $2,500 a month, but that was on about $450K of the $920K total value. When I sold it, I was able to earn interest on an additional $430K.

None of this is to say that you should have sold earlier, or that you are a fool for not doing so, just that depreciating assets do incur a real cost.

The flip side of this is someone’s comment to me, circa 2000, that I was living effectively rent free in San Jose because of the appreciation of my house. True then, opposite true now.

[Fearful]

And if I were the speculator at the beginning of this thread, I would seriously consider extracting as much money as I could, converting it to gold coins, stuffing them up my ass, and fleeing the country. Hope he knows spanish and can find his way around, as suggested, Costa Rica.

We are entering a phase, the end results of which I saw in Austin around 1992: One fine fellow from Houston came in and spoke to our business school about his ride from $0 to $500M all the way down to negative $500K, all based on Texas real estate. The carnage this time around is going to be just awful.

[sdrealtor]

Still dont understand how I lost money that I never had. I’ve got to live somewhere and moving is expensive. My tax basis is low. My after tax monthly cost is about half of my cost to rent a similar property. I still could sell my house if I wanted to so the only opportunity cost of concern is on the opportunity cost of investing the excess proceeds that you think I lost. That is neglible at this point. I’ve lost nothing.

As for the other side of the coin, I never got to live rent free and always paid a mortgage. Sure my property value went up but I still had monthly rent.

[NotCranky]

I would bet that housing for almost everyone on this blog represents an opportunity cost, whether they are renting or paying a mortgage or debt free. Anyone who has more roof over their heads than a shack with a toilet and a sink is paying an opportunity cost. It is easier to swallow that opportunity cost, as sdrealtor says, when it is on paper, the inflated value of it was a gift anyway and keeping the property in the face of depreciation is offset by several other factors, some of them economic.

[NotCranky]

I would bet that housing for almost everyone on this blog represents an opportunity cost, whether they are renting or paying a mortgage or debt free. Anyone who has more roof over their heads than a shack with a toilet and a sink is paying an opportunity cost. It is easier to swallow that opportunity cost, as sdrealtor says, when it is on paper, the inflated value of it was a gift anyway and keeping the property in the face of depreciation is offset by several other factors, some of them economic.

[NotCranky]

I would bet that housing for almost everyone on this blog represents an opportunity cost, whether they are renting or paying a mortgage or debt free. Anyone who has more roof over their heads than a shack with a toilet and a sink is paying an opportunity cost. It is easier to swallow that opportunity cost, as sdrealtor says, when it is on paper, the inflated value of it was a gift anyway and keeping the property in the face of depreciation is offset by several other factors, some of them economic.

[NotCranky]

I would bet that housing for almost everyone on this blog represents an opportunity cost, whether they are renting or paying a mortgage or debt free. Anyone who has more roof over their heads than a shack with a toilet and a sink is paying an opportunity cost. It is easier to swallow that opportunity cost, as sdrealtor says, when it is on paper, the inflated value of it was a gift anyway and keeping the property in the face of depreciation is offset by several other factors, some of them economic.

[sdrealtor]

Still dont understand how I lost money that I never had. I’ve got to live somewhere and moving is expensive. My tax basis is low. My after tax monthly cost is about half of my cost to rent a similar property. I still could sell my house if I wanted to so the only opportunity cost of concern is on the opportunity cost of investing the excess proceeds that you think I lost. That is neglible at this point. I’ve lost nothing.

As for the other side of the coin, I never got to live rent free and always paid a mortgage. Sure my property value went up but I still had monthly rent.

[sdrealtor]

Still dont understand how I lost money that I never had. I’ve got to live somewhere and moving is expensive. My tax basis is low. My after tax monthly cost is about half of my cost to rent a similar property. I still could sell my house if I wanted to so the only opportunity cost of concern is on the opportunity cost of investing the excess proceeds that you think I lost. That is neglible at this point. I’ve lost nothing.

As for the other side of the coin, I never got to live rent free and always paid a mortgage. Sure my property value went up but I still had monthly rent.

[sdrealtor]

Still dont understand how I lost money that I never had. I’ve got to live somewhere and moving is expensive. My tax basis is low. My after tax monthly cost is about half of my cost to rent a similar property. I still could sell my house if I wanted to so the only opportunity cost of concern is on the opportunity cost of investing the excess proceeds that you think I lost. That is neglible at this point. I’ve lost nothing.

As for the other side of the coin, I never got to live rent free and always paid a mortgage. Sure my property value went up but I still had monthly rent.

[Fearful]

And if I were the speculator at the beginning of this thread, I would seriously consider extracting as much money as I could, converting it to gold coins, stuffing them up my ass, and fleeing the country. Hope he knows spanish and can find his way around, as suggested, Costa Rica.

We are entering a phase, the end results of which I saw in Austin around 1992: One fine fellow from Houston came in and spoke to our business school about his ride from $0 to $500M all the way down to negative $500K, all based on Texas real estate. The carnage this time around is going to be just awful.

[Fearful]

And if I were the speculator at the beginning of this thread, I would seriously consider extracting as much money as I could, converting it to gold coins, stuffing them up my ass, and fleeing the country. Hope he knows spanish and can find his way around, as suggested, Costa Rica.

We are entering a phase, the end results of which I saw in Austin around 1992: One fine fellow from Houston came in and spoke to our business school about his ride from $0 to $500M all the way down to negative $500K, all based on Texas real estate. The carnage this time around is going to be just awful.

[Fearful]

And if I were the speculator at the beginning of this thread, I would seriously consider extracting as much money as I could, converting it to gold coins, stuffing them up my ass, and fleeing the country. Hope he knows spanish and can find his way around, as suggested, Costa Rica.

We are entering a phase, the end results of which I saw in Austin around 1992: One fine fellow from Houston came in and spoke to our business school about his ride from $0 to $500M all the way down to negative $500K, all based on Texas real estate. The carnage this time around is going to be just awful.

[Fearful]

I bought my house about 10 years ago. Its worth alot more than I paid for it and always will be. If something were to happen that made it worth less than i paid it wouldnt bother me in the least. I have no desire to sell it and probably never will. As a rental it would be cash flow positive in big way even today.

Now unless I’m not “everyone”, please explain to me how I’ve lost money?

You have lost money because you could have sold for more earlier. Your house has dropped in value, and as long as selling it was an option, that drop in value was a real cost to you.

And only considering the payment means you are ignoring the opportunity cost of money. The monthly cost of your house is cash flow out plus the earning you could have gotten from the capital. For example, the payment on my house in San Jose was about $2,500 a month, but that was on about $450K of the $920K total value. When I sold it, I was able to earn interest on an additional $430K.

None of this is to say that you should have sold earlier, or that you are a fool for not doing so, just that depreciating assets do incur a real cost.

The flip side of this is someone’s comment to me, circa 2000, that I was living effectively rent free in San Jose because of the appreciation of my house. True then, opposite true now.

[Fearful]

I bought my house about 10 years ago. Its worth alot more than I paid for it and always will be. If something were to happen that made it worth less than i paid it wouldnt bother me in the least. I have no desire to sell it and probably never will. As a rental it would be cash flow positive in big way even today.

Now unless I’m not “everyone”, please explain to me how I’ve lost money?

You have lost money because you could have sold for more earlier. Your house has dropped in value, and as long as selling it was an option, that drop in value was a real cost to you.

And only considering the payment means you are ignoring the opportunity cost of money. The monthly cost of your house is cash flow out plus the earning you could have gotten from the capital. For example, the payment on my house in San Jose was about $2,500 a month, but that was on about $450K of the $920K total value. When I sold it, I was able to earn interest on an additional $430K.

None of this is to say that you should have sold earlier, or that you are a fool for not doing so, just that depreciating assets do incur a real cost.

The flip side of this is someone’s comment to me, circa 2000, that I was living effectively rent free in San Jose because of the appreciation of my house. True then, opposite true now.

[Fearful]

I bought my house about 10 years ago. Its worth alot more than I paid for it and always will be. If something were to happen that made it worth less than i paid it wouldnt bother me in the least. I have no desire to sell it and probably never will. As a rental it would be cash flow positive in big way even today.

Now unless I’m not “everyone”, please explain to me how I’ve lost money?

You have lost money because you could have sold for more earlier. Your house has dropped in value, and as long as selling it was an option, that drop in value was a real cost to you.

And only considering the payment means you are ignoring the opportunity cost of money. The monthly cost of your house is cash flow out plus the earning you could have gotten from the capital. For example, the payment on my house in San Jose was about $2,500 a month, but that was on about $450K of the $920K total value. When I sold it, I was able to earn interest on an additional $430K.

None of this is to say that you should have sold earlier, or that you are a fool for not doing so, just that depreciating assets do incur a real cost.

The flip side of this is someone’s comment to me, circa 2000, that I was living effectively rent free in San Jose because of the appreciation of my house. True then, opposite true now.

[sdrealtor]

sandiego’s statement was “everyone who owns a house in California (me included) is losing more than $1,400 a month ($17,200 a year) on homes that they actually occupy.”

I bought my house about 10 years ago. Its worth alot more than I paid for it and always will be. If something were to happen that made it worth less than i paid it wouldnt bother me in the least. I have no desire to sell it and probably never will. As a rental it would be cash flow positive in big way even today.

Now unless I’m not “everyone”, please explain to me how I’ve lost money?

[sdrealtor]

sandiego’s statement was “everyone who owns a house in California (me included) is losing more than $1,400 a month ($17,200 a year) on homes that they actually occupy.”

I bought my house about 10 years ago. Its worth alot more than I paid for it and always will be. If something were to happen that made it worth less than i paid it wouldnt bother me in the least. I have no desire to sell it and probably never will. As a rental it would be cash flow positive in big way even today.

Now unless I’m not “everyone”, please explain to me how I’ve lost money?

[sdrealtor]

sandiego’s statement was “everyone who owns a house in California (me included) is losing more than $1,400 a month ($17,200 a year) on homes that they actually occupy.”

I bought my house about 10 years ago. Its worth alot more than I paid for it and always will be. If something were to happen that made it worth less than i paid it wouldnt bother me in the least. I have no desire to sell it and probably never will. As a rental it would be cash flow positive in big way even today.

Now unless I’m not “everyone”, please explain to me how I’ve lost money?

[sandiego]

Well, based on where prices are trending, everyone who owns a house in California (me included) is losing more than $1,400 a month ($17,200 a year) on homes that they actually occupy.

[sandiego]

Well, based on where prices are trending, everyone who owns a house in California (me included) is losing more than $1,400 a month ($17,200 a year) on homes that they actually occupy.

[sandiego]

Well, based on where prices are trending, everyone who owns a house in California (me included) is losing more than $1,400 a month ($17,200 a year) on homes that they actually occupy.

[Fearful]

There are all degrees of speculator. The house I rent is owned by a nice guy, a physician who moved with his family to Chicago. I calculated the numbers on this place and reckon he is absorbing $1,400 a month negative cash flow. Ouch.

[Fearful]

There are all degrees of speculator. The house I rent is owned by a nice guy, a physician who moved with his family to Chicago. I calculated the numbers on this place and reckon he is absorbing $1,400 a month negative cash flow. Ouch.

[Fearful]

There are all degrees of speculator. The house I rent is owned by a nice guy, a physician who moved with his family to Chicago. I calculated the numbers on this place and reckon he is absorbing $1,400 a month negative cash flow. Ouch.

[patientrenter]

I think many of these now overextended young people with apparently limited career prospects who became no-money-down buyers of multiple properties were doing a very smart thing. Dumb lenders allowed them to buy valuable options on house prices for free, or for very little. All they had to lose was a few years’ worth of good credit. Not a big price to pay for someone with no money and limited prospects.

Let’s say the monetary value of poor credit for a few years for such a person is $20,000. That’s their downside. If they bought 8 properties worth $300K each, and the properties went up by 50% over 3 years (not unusual in recent times) they probably netted almost a million. No one could know the future, and the gamble for recent buyers is turning out badly, but it was a gamble heavily loaded in favor of the ‘dumb’ buyer.

Patient renter in OC

[patientrenter]

I think many of these now overextended young people with apparently limited career prospects who became no-money-down buyers of multiple properties were doing a very smart thing. Dumb lenders allowed them to buy valuable options on house prices for free, or for very little. All they had to lose was a few years’ worth of good credit. Not a big price to pay for someone with no money and limited prospects.

Let’s say the monetary value of poor credit for a few years for such a person is $20,000. That’s their downside. If they bought 8 properties worth $300K each, and the properties went up by 50% over 3 years (not unusual in recent times) they probably netted almost a million. No one could know the future, and the gamble for recent buyers is turning out badly, but it was a gamble heavily loaded in favor of the ‘dumb’ buyer.

Patient renter in OC

[patientrenter]

I think many of these now overextended young people with apparently limited career prospects who became no-money-down buyers of multiple properties were doing a very smart thing. Dumb lenders allowed them to buy valuable options on house prices for free, or for very little. All they had to lose was a few years’ worth of good credit. Not a big price to pay for someone with no money and limited prospects.

Let’s say the monetary value of poor credit for a few years for such a person is $20,000. That’s their downside. If they bought 8 properties worth $300K each, and the properties went up by 50% over 3 years (not unusual in recent times) they probably netted almost a million. No one could know the future, and the gamble for recent buyers is turning out badly, but it was a gamble heavily loaded in favor of the ‘dumb’ buyer.

Patient renter in OC

[Author]

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