Posted on 06/02/2008 6:57:16 AM PDT by Diana in Wisconsin
They also put the money they made on each house into the next one they bought. They didn’t burn the money on BS as they traded up.
The fatal mistake was getting an ARM. They would still be in their house with a conventional loan. Not sure why someone would us a ARM if they planned on keeping the house?
Gary is one of an increasingly rare species. I bet he and his wife recover and do nicely down the road. I hope so.
I don’t think they pulled much out of the real estate other than the 2nd loan. Figure they spent 6% on each sale for commission (~40K). They also had closing costs associated with each purchase (2-3% on a total of $1.03M in 3 purchases). It certainly wasn’t $119K they pulled out.
“I’m in somewhat of a mess myself, and it is clearly my own fault.”
I am in the same boat. I moved to Phoenix and bought a lovely house (my wife, three teenagers, three dogs and myself). We decided to move back east, but housing prices have dropped 20%. Well, I am working uber-overtime to pay off the unpaid balance.
I could do a “short sale” and stiff the lender for the difference between my sales price (less Realtors fees) and the unpaid balance. But I signed a Promissory Note saying that I owe the lender the money. Seems pretty straightforward to me. Honor thy debts and promises.
Have you seen her home designs? (Link, below) They’re very nice & practical. I have way more house than I need, but I wanted the LAND, and not the house. We, too, are only 2 people (and two dogs and two cats) in a 3-story house, that used to house five and sometimes six of us. We’re mid-40’s now, and our “farmette” it’s a little Midwest Goldmine, so we’ll hold on for another decade, then greatly downsize. ;) (I can’t wait, actually!)
I've heard stories of woe from people who had a custom house built. I've never met someone that went that route twice. Even people in the house building industry have little desire to build their own custom house. Apparently it's a big headache.
Why? I like my stuff. I don't want to sell my stuff. I want a basement not only to store the Christmas decorations, home repair equipment, and some books, but also to have a workshop, a little art studio in an area where the smell won't bother everybody else, and a laundry room big enough to sort laundry and open up an ironing board while I watch TV. I want a place to hang my saddles and bridles without risk that they'll get cooked by the heat of a garage in summer. I want a place where the kids can have their friends over to watch dvds and shoot each other with pellet guns, and I won't get hysterical because they're leaving potato chip crumbs on the Persian rug in the living room or wrestling around near antiques.
In the case of these people, they were trying to run a business out of their home and they may have wanted kids at some point, so having a lot of bedrooms makes sense.
And if you have the money to afford all your "stuff" AND buy the house and keep up payments on it, more power to you.
In the case of these people, they were trying to run a business out of their home and they may have wanted kids at some point, so having a lot of bedrooms makes sense.
Ahhh, you're a little mixed up.
They already have grown children that were out of the house.
They didn't start trying to run their business out of the house till they couldn't make payments anymore.
Sorry, but this twaddle doesn't fly in this particular case.
Two people, I don't care HOW much "stuff" they have, don't need a 5 bedroom house unless they are taking in boarders.
Despite the WI and CA residency, there is no way that these people are “liberal”...
I have NEVER seen a lib accept responsibility for their choices.
They turned a quarter of million dollars from real estate since 99, so what’s the problem?
As a single woman who is constantly being told “You don’t NEED” this or that or something else that I have, I would like to say what I always tell them: “Sez who?”
Although Mama conceded that my answer to her “Why does a single woman need a maid?” i.e. “I have two jobs, one of them involving a lot of travel” was a good one.
If I ever bought a house, which I never will, I would have at least four bedrooms in it. I have a lot of family and friends and I’d like to put them somewhere besides on blow-up mattresses in the living room.
Where does the dog work out?
Outside.
Please. It's a freakin' dog.
< |:)~
"The banks loaned money to all kinds of people they shouldn't have, including us," Gary said. "This situation we're in is one of our own making. We were not taken advantage of."
Whole ball of wax...but surprising to see it recognized and in print...
People need to decide for themselves how much house they can afford. Just use the old tried and true formula: Mortgage not to exceed 1/4 of monthly income. Indeed, smart ones would go even lower, leaving a buffer.
And tell the lenders, who now 'qualify' people on the most convoluted criteria ever designed, to stuff it.
Watch words: Thou shalt not covet more than thy can afford.
I couldn't agree more. Buy what you want. Just remember the rule of making money. You have control how much you pay for something, not for how much you sell it for.
Business gross is not net, and they were probably using profits to grow their business as well. With employees, they were probably making a nice profit, but who knows - maybe they put their own money in the business too long before letting go of their employees.
But I’m buying and keeping. Not buying and selling.
Kudos to the couple for not blaming anybody for the catastrophe that caused.
That said, I am simply amazed by man’s capacity for stupidity when they are in denial and don’t want to believe anything that contradicts their preconceived notions. “See honey, the home has shot up like a meteor therefore past performance DOES necessarily predict future returns, right???”
I am even more dumbfounded by the sheer exhausting numbers of otherwise intelligent people who behaved with such massive stupidity only by burying their head in the sand and pretending that the party would go on forever and ever.
Unfortunately, stupidity hurts.
I used to have the desire to build a home, but no more. There are plenty of already-built places where I could live quite happily. :)
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