Just bought a house for 40% less than was owed

[ruf-porsche]

Originally Posted by SLO-BOB

...........Good memory. It's nice to know my posts are actually read by someone. ............

Hey, now I remember you, your the guy in the Yukon XL w/Pirelli Scorpians that cut me off.





Just messin with you again





LOL

[berettafan]

I did not know the house was on the market until i rec'd the email from the realtor. Used to check the MLS daily but quit about 2yrs ago when NOTHING on the market would cash flow. Now that things are a bit different we will start watching more closely.

I know the last owner owed $125k because I searched online and found the paperwork.

On the subject of no $$ down I am lost on how I am somehow contributing to a problem or making a bad decision. The house cash flows. That is all that matters in this scenario. Very few folks in this world get anywhere without leverage and so long as it is available to me I will use it. Danny Devito wasn't bull****tin' when he talked about OPM. I love to use OPM. Understand that the deal makes sense here. It is not based on projections that are pie in the sky. BIG difference between this and buying a $2m commercial property that doesn't cash flow and hoping somehow i can pull some cash out of it before i lose it. Lots of that kinda nonsense going around for sure.

[ruf-porsche]

Originally Posted by berettafan

I did not know the house was on the market until i rec'd the email from the realtor. Used to check the MLS daily but quit about 2yrs ago when NOTHING on the market would cash flow. Now that things are a bit different we will start watching more closely.

I know the last owner owed $125k because I searched online and found the paperwork.

On the subject of no $$ down I am lost on how I am somehow contributing to a problem or making a bad decision. The house cash flows. That is all that matters in this scenario. Very few folks in this world get anywhere without leverage and so long as it is available to me I will use it. Danny Devito wasn't bull****tin' when he talked about OPM. I love to use OPM. Understand that the deal makes sense here. It is not based on projections that are pie in the sky. BIG difference between this and buying a $2m commercial property that doesn't cash flow and hoping somehow i can pull some cash out of it before i lose it. Lots of that kinda nonsense going around for sure.

You mean to tell me that all the time you went to see your property across the street there was never a Forsale sign on this property?

[Big Ed]

Originally Posted by ruf-porsche

You mean to tell me that all the time you went to see your property across the street there was never a Forsale sign on this property?

What difference would it make if he did? I've seen plenty of places listed for sale for more than they are worth...does that fact that I buy only those that I believe are a good value make me a jerk?

Or should I buy overpriced properties and then end up losing them to the bank when I can't service the note. Is that better?

[ruf-porsche]

Originally Posted by Big Ed

What difference would it make if he did? I've seen plenty of places listed for sale for more than they are worth...does that fact that I buy only those that I believe are a good value make me a jerk?

Or should I buy overpriced properties and then end up losing them to the bank when I can't service the note. Is that better?

It means telling the truth.

[911Rob]

I say Congrats BF!
Cheers,

[competentone]

Originally Posted by ruf-porsche

I never said that BF was a bad guy. If people would just read my first post I just ask that he think about the family that was there before, however, after reading some of BF posts I think he knew more about the house than what he has let on.

He has another house across the street so he must have known that this house was on the market. Since the house had a lot of improvement done to it it is easy to say that a homeowner and not a renter (sorry Todd) occupied the house. Like most home owners that are in a bind I am sure that he would have tried to sell the house before foreclosure and that BF must have known the house across from him was forsale. I'm sure BF knew that a homeowner own the house and not some drug dealer, or speculator, or person that die as some had alluded to.

Granted he didn't need to make an offer to the original owner, but like a previous poster had said Vultures are the one that pick over the carcass.

As for vacant homes dragging down the housing market, I think that the market is already down because of this mess.

I don't quite understand why you are expressing some level of "disgust" with a person making a business decision and buying a foreclosed house.

What do you suggest should have been done in this situation and with similar situations happening around the country?

Do you think we all (as taxpayers) should be paying to "bail out" other homeowners who cannot afford their mortgages?

Are you saying that people who can actually afford to buy homes, or are willing to invest in the real estate market buying and renting homes should not be buying any foreclosed homes because some other person may have "suffered" when they lost the home?

I just don't understand what is at the root of your opposition to "berettafan's" actions here. It seems to me, he is precisely what the current real estate market needs.

We need private business people to be buying foreclosed homes -- and banks to be "taking their losses" -- instead of having the government (funded by the taxpayers) involved in trying to artificially manipulate real estate markets to some position that some politician thinks is "acceptable."

Let the market place work.

[Joe Ricard]

Originally Posted by therotman

The people who promised to pay the bank a certain amount and then decided it wasn't in their best interest and stopped making payments?


poor them.......

Wurd,

I have the utmost admiration for Barretta Fan that can take care of HIS family.

I too am watching a few houses here. Lots of properties for sale but prices are still over inflated from past hurricanes.

and yes a bigger picture look is one less abandoned house on the block which will help surrounding property values. Don't give a crap about the banks as they are sleeping in the bed they made. I am making a point to pay my houses off as quikly as possible so they don't collect my interest money.

[Tishabet]

Originally Posted by competentone

I don't quite understand why you are expressing some level of "disgust" with a person making a business decision and buying a foreclosed house.

What do you suggest should have been done in this situation and with similar situations happening around the country?

Do you think we all (as taxpayers) should be paying to "bail out" other homeowners who cannot afford their mortgages?

Are you saying that people who can actually afford to buy homes, or are willing to invest in the real estate market buying and renting homes should not be buying any foreclosed homes because some other person may have "suffered" when they lost the home?

I just don't understand what is at the root of your opposition to "berettafan's" actions here. It seems to me, he is precisely what the current real estate market needs.

We need private business people to be buying foreclosed homes -- and banks to be "taking their losses" -- instead of having the government (funded by the taxpayers) involved in trying to artificially manipulate real estate markets to some position that some politician thinks is "acceptable."

Let the market place work.

+1

Ruf, you seem to have a dog in this fight... mind sharing?

[SLO-BOB]

Originally Posted by nostatic

you've spoken with my neighbors, eh?

Nah, it's a website.

[berettafan]

Originally Posted by ruf-porsche

You mean to tell me that all the time you went to see your property across the street there was never a Forsale sign on this property?

There are for sale signs everywhere but as mentioned i quit looking a while back when it became clear everybody was looking to cash out. I don't have to visit the house much at all as my wife drives near it every day. I hear about how the family is doing from my wife who has taught 2 of their kids (one was recently voted class president which is, IMO, a pretty big achievement given the circumstances) and don't need to burn gas for nothing.

[berettafan]

Ruf you might be surprised to hear i have been very vocal about 'predatory lending'. I STRONGLY believe that just because a man will sign on the line for a loan doesn't mean it's right to lend to him.

I know you are just frustrated with the situation we all are watching and not specifically me and i understand. I AM taking some risk to be sure. But as i am not an exceptional person in any way i have to hustle a bit more to keep up and to ensure that i don't have to work the rest of my life and that when i am old and confused i don't become a burden for my son. You can either BE the man or you can work for the man. I am a LONG ways from being the man (which by my definition means one has 'fuch you money') but i gotta start somewhere.

[Britwrench]

Quote from competentone:

"I just don't understand what is at the root of your opposition to "berettafan's" actions here. It seems to me, he is precisely what the current real estate market needs.

We need private business people to be buying foreclosed homes -- and banks to be "taking their losses" -- instead of having the government (funded by the taxpayers) involved in trying to artificially manipulate real estate markets to some position that some politician thinks is "acceptable."
Let the market place work"

Actually, that is exactly what is happening. It started, we are assuming here, with the bank or mortgage lender making a poor loan and now the house is foreclosed and for sale.
Now the lender will try and recover the loan amount by selling the property to the best offer (nothing wrong with that) and possibly some money from the government's bail-out. Ok so we might not agree with that, but it's happening.

The next step is receive money from the buyer, in this case the seller is not receiving any money, it's just another loan. That is my concern, it's similar in a way smaller way, but if you look at how many times this is being done (no figures to back this up) it's exactly the same as when the housewas sold the last time (again, an assumption), the same as GMAC lending to buy GM products, the same as Boeing Finance leasing planes and then ending up with their own products back and no money.

If you really want the property (or any business proposition) and see that it is an acceptable risk, use your money, or at least a significant percentage of the asking price.

[Big Ed]

Originally Posted by Britwrench

The next step is receive money from the buyer, in this case the seller is not receiving any money, it's just another loan. That is my concern, it's similar in a way smaller way, but if you look at how many times this is being done (no figures to back this up) it's exactly the same as when the housewas sold the last time (again, an assumption), the same as GMAC lending to buy GM products, the same as Boeing Finance leasing planes and then ending up with their own products back and no money.

FAIL. bf didn't get the loan from the selling bank, he went to his banker, got qualified for a loan, and paid the seller.

Without even knowing any of the particulars, I am certain that this new loan is nowhere near as risky as the one that got foreclosed upon. Used to be anybody could get a loan. RIGHT NOW, you better be qualified or don't even ask.

[Britwrench]

Big Ed,

You are entirely correct, the seller did receive an ageed payment, it just did not come from the buyer.
I did not phrase that correctly.

Some of our customers are with banks and getting property loans, regardless of the interest rate, is somewhat more difficult.

However, I stand by my no money up-front opinion.

[SLO-BOB]

Originally Posted by ruf-porsche

Maybe it was a home own by a family like this

Originally Posted by SLO-BOB
Or...compare yourself to the less fortunate. I watched my neighbor load all his possessions in a U-haul the other day. Apparently another victim of foreclosure. Pretty damn sad watching he, his wife, and 3 kids leave their home behind 2 days before Christmas.

Update - it probably was. Talked to the former neighbor this a.m. as I was digging her Tiburon pos out of the snowbank that was her driveway. She actually tried to drive it up over the plowed up bank that had thawed and frozen over the past week.

Anyway, we hadn't spoken since before their departure so I asked where they had been. They had indeed moved to the neighboring town. She was pretty vague but she said that the house needed $60k worth of repair work and the mortgage was "insane" because they didn't put anything down.

I liked them. They were good neighbors, but fact is if you're looking for a bad guy, they are it. They are both employed so no excuses there. They bought over their head (about $150k house so similar scenario), put nothing down, and when the chips were down, instead of toughing it out, they walked. It was all too easy. They basically paid rent for a year. Also, I don't believe the house really needs $60k worth of work. I'm guessing it's what they told themselves to justify walking. So now we have a house that's abandoned and in need of repair dragging our home values down.

Fact is, I would be grateful for someone like BF to swoop in and buy this thing before it gets worse. The lawn will be overgrown and it will look like hell soon. Unfortunately, it's not a good investment because of the repair needed (even if it's only $20k) and the amount the bank is going to need. This thing will sit for a long time.

So not only do I think BF did nothing wrong, I say we need more guys like BF to help this nation recover.

But the good news is, just because we disagree doesn't mean I won't buy you a beer at Road America this summer.

[Jim Richards]

I agree. It's better to snap up these homes at a big discount, as the banks are getting our tax money to help with their losses. Then, they can be rented out to families that need a home and cannot afford to buy...which, btw, was the way things were before the housing/subprime credit bubble formed. Kudos to BF.

[sailchef]

Berettafan, Congratulations on your new purchase. Some poeple still dont get it. The economy is in a major snafu. This is a great time to buy a house, and like Big Ed said you really need to pass much stiffer criteria to get a lone these days. I dont understand why terms like "carpet bagger" and "slum lord " have been tossed around here.

[bt1211]

I bought two buildings this year. One a 2-flat and a 4-flat. Both less than a 1/3 of there value 2 years ago.

Now is the time to buy. It is called the real estate BUSINESS not the real estate "buy something and see what happens"

If you dont have cashflow and are not good at vetting tenants, you aint in the real estate BUSINESS

[ruf-porsche]

Originally Posted by SLO-BOB

But the good news is, just because we disagree doesn't mean I won't buy you a beer at Road America this summer.

Don't think that I'm going to forget that offer (I have a good memory), see you at RA this summer.