[davelj]

djrob, thanks for sharing your story. A couple of comments.

OK, you were dumb. You’re probably going to cost whatever institution(s) lent you this money a lot of money and inconvenience (ultimately). They and their investors are unhappy with you and for good reason. You’re breaking the contract that you signed. So, this “loss mitigation” process that you apparently find so tedious (so many questions!) is supposed to be inconvenient. It’s supposed to be painful. Why? As I said, you’re about to cost the owners of your loan money. You’re the problem. It’s understandable.

Now, you realize you were dumb and you’re trying to “work this out.” That’s a start. However, it’s probably not going to work. Things are probably still too institutionalized and bureaucratized [may not be a word] for your efforts to get anywhere. Thus, for you personally it’s probably better to just walk away from this thing, take the dings to your credit and come back in seven years and try ownership again when you’re better prepared for it. It ain’t the end of the world. You rolled the dice and lost. Move on. Don’t dwell on it. But remember, you aren’t the victim (and I don’t think you see yourself as the victim, which is good); the institutions who are going to absorb your loss are.

[davelj]

djrob, thanks for sharing your story. A couple of comments.

OK, you were dumb. You’re probably going to cost whatever institution(s) lent you this money a lot of money and inconvenience (ultimately). They and their investors are unhappy with you and for good reason. You’re breaking the contract that you signed. So, this “loss mitigation” process that you apparently find so tedious (so many questions!) is supposed to be inconvenient. It’s supposed to be painful. Why? As I said, you’re about to cost the owners of your loan money. You’re the problem. It’s understandable.

Now, you realize you were dumb and you’re trying to “work this out.” That’s a start. However, it’s probably not going to work. Things are probably still too institutionalized and bureaucratized [may not be a word] for your efforts to get anywhere. Thus, for you personally it’s probably better to just walk away from this thing, take the dings to your credit and come back in seven years and try ownership again when you’re better prepared for it. It ain’t the end of the world. You rolled the dice and lost. Move on. Don’t dwell on it. But remember, you aren’t the victim (and I don’t think you see yourself as the victim, which is good); the institutions who are going to absorb your loss are.

[davelj]

djrob, thanks for sharing your story. A couple of comments.

OK, you were dumb. You’re probably going to cost whatever institution(s) lent you this money a lot of money and inconvenience (ultimately). They and their investors are unhappy with you and for good reason. You’re breaking the contract that you signed. So, this “loss mitigation” process that you apparently find so tedious (so many questions!) is supposed to be inconvenient. It’s supposed to be painful. Why? As I said, you’re about to cost the owners of your loan money. You’re the problem. It’s understandable.

Now, you realize you were dumb and you’re trying to “work this out.” That’s a start. However, it’s probably not going to work. Things are probably still too institutionalized and bureaucratized [may not be a word] for your efforts to get anywhere. Thus, for you personally it’s probably better to just walk away from this thing, take the dings to your credit and come back in seven years and try ownership again when you’re better prepared for it. It ain’t the end of the world. You rolled the dice and lost. Move on. Don’t dwell on it. But remember, you aren’t the victim (and I don’t think you see yourself as the victim, which is good); the institutions who are going to absorb your loss are.

[davelj]

djrob, thanks for sharing your story. A couple of comments.

OK, you were dumb. You’re probably going to cost whatever institution(s) lent you this money a lot of money and inconvenience (ultimately). They and their investors are unhappy with you and for good reason. You’re breaking the contract that you signed. So, this “loss mitigation” process that you apparently find so tedious (so many questions!) is supposed to be inconvenient. It’s supposed to be painful. Why? As I said, you’re about to cost the owners of your loan money. You’re the problem. It’s understandable.

Now, you realize you were dumb and you’re trying to “work this out.” That’s a start. However, it’s probably not going to work. Things are probably still too institutionalized and bureaucratized [may not be a word] for your efforts to get anywhere. Thus, for you personally it’s probably better to just walk away from this thing, take the dings to your credit and come back in seven years and try ownership again when you’re better prepared for it. It ain’t the end of the world. You rolled the dice and lost. Move on. Don’t dwell on it. But remember, you aren’t the victim (and I don’t think you see yourself as the victim, which is good); the institutions who are going to absorb your loss are.

[davelj]

According to Money Magazine (which could be wrong, of course) there are approximately 4 million millionaire households out of roughly 75 million total households nationwide. Money Magazine does not include primary residence or retirement assets in their definition of millionaire. So, that’s 5.3% of all households nationwide. Seeing as SD is a much higher-than-average income city – particularly at the high end – it doesn’t surprise me at all that 10% of the households in SD are millionaires.

[davelj]

According to Money Magazine (which could be wrong, of course) there are approximately 4 million millionaire households out of roughly 75 million total households nationwide. Money Magazine does not include primary residence or retirement assets in their definition of millionaire. So, that’s 5.3% of all households nationwide. Seeing as SD is a much higher-than-average income city – particularly at the high end – it doesn’t surprise me at all that 10% of the households in SD are millionaires.

[davelj]

According to Money Magazine (which could be wrong, of course) there are approximately 4 million millionaire households out of roughly 75 million total households nationwide. Money Magazine does not include primary residence or retirement assets in their definition of millionaire. So, that’s 5.3% of all households nationwide. Seeing as SD is a much higher-than-average income city – particularly at the high end – it doesn’t surprise me at all that 10% of the households in SD are millionaires.

[davelj]

First of all, I’m guessing that Mike Railey didn’t save up much of the money he was making as a mortgage broker over the last several years if for no other reason than he admitted that he was scared and struggling. That kind of speaks for itself.

Fortunately, as a society we all benefit from entrepreneurs/inventors like Railey. Sure, 99% of them bite the dust, but that 1% brings an awful lot to the table. Who knows? Maybe Railey’s motorized surfboard will be some great benefit to consumers. Regardless, as a society we benefit from all those who try (in aggregate) even though the vast majority fail (individually).

When I meet people like Railey – and there are a lot of them out there – I always tell them that I think they’re crazy, but I thank them for their efforts. Find me 100 Raileys and I’ll bet against all 100… and I’ll be wrong maybe on one. But that one success, well that’s what really moves society forward. So long as I don’t have to personally subsidize these wacky folks, I’m a big fan of their risk taking.

[davelj]

First of all, I’m guessing that Mike Railey didn’t save up much of the money he was making as a mortgage broker over the last several years if for no other reason than he admitted that he was scared and struggling. That kind of speaks for itself.

Fortunately, as a society we all benefit from entrepreneurs/inventors like Railey. Sure, 99% of them bite the dust, but that 1% brings an awful lot to the table. Who knows? Maybe Railey’s motorized surfboard will be some great benefit to consumers. Regardless, as a society we benefit from all those who try (in aggregate) even though the vast majority fail (individually).

When I meet people like Railey – and there are a lot of them out there – I always tell them that I think they’re crazy, but I thank them for their efforts. Find me 100 Raileys and I’ll bet against all 100… and I’ll be wrong maybe on one. But that one success, well that’s what really moves society forward. So long as I don’t have to personally subsidize these wacky folks, I’m a big fan of their risk taking.

[davelj]

First of all, I’m guessing that Mike Railey didn’t save up much of the money he was making as a mortgage broker over the last several years if for no other reason than he admitted that he was scared and struggling. That kind of speaks for itself.

Fortunately, as a society we all benefit from entrepreneurs/inventors like Railey. Sure, 99% of them bite the dust, but that 1% brings an awful lot to the table. Who knows? Maybe Railey’s motorized surfboard will be some great benefit to consumers. Regardless, as a society we benefit from all those who try (in aggregate) even though the vast majority fail (individually).

When I meet people like Railey – and there are a lot of them out there – I always tell them that I think they’re crazy, but I thank them for their efforts. Find me 100 Raileys and I’ll bet against all 100… and I’ll be wrong maybe on one. But that one success, well that’s what really moves society forward. So long as I don’t have to personally subsidize these wacky folks, I’m a big fan of their risk taking.

[davelj]

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.

[davelj]

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.

[davelj]

pw, the acquisition cost for my place wasn’t below $125/sf (I wish). I was just making the point that the addition itself makes sense so long as the value of the home as a whole doesn’t fall below $125/sf. Pardon the confusion.

[davelj]

pw, the acquisition cost for my place wasn’t below $125/sf (I wish). I was just making the point that the addition itself makes sense so long as the value of the home as a whole doesn’t fall below $125/sf. Pardon the confusion.

[davelj]

The construction/remodel gurus can correct me if I’m wrong but to some extent it depends on where you are in the pricing cycle. When home prices are expensive, it almost always makes more sense to add on because you already own the land, so you don’t have to pay for it twice. You’re just paying for the materials and labor for the addition. So you enjoy what’s called “forced value” in your home. That is, your addition might cost you $150/square foot but the “value” might be $350/square foot after it’s completed.

But when home prices are really cheap it might make more sense to buy a whole new house.

My guess is that, more often than not, adding an addition is cheaper and more financially beneficial than buying a whole new house (assuming your contractor isn’t a clown that’s trying to rip you off). But, again, I think it depends on where the market is for resale homes versus the cost of doing the addition.

I recently did an addition to my place for about $125/square foot. Even though my place is overvalued right now, I doubt it will fall to below $125/square foot. If it does, I’ll probably be in a below-ground bunker hording food.

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