Just bought a house for 40% less than was owed

berettafan · 01-01-2009, 06:26 AM

Small rancher was purchased for $125k 2yrs ago. Bank recently took it back and listed it for $100k (probably was listed for more before we saw it). A sharp realtor friend sends out emails with bank owned property listings and this was in one of them.

It happens to be across the street from a rental property my partner and I (business partner you sick bastards) own and is nearly identical. We happily paid $92k for the other home about 3yrs ago.

Long story short this place (3br/1ba) is in better shape and we got it for $75k.

Un-freaking-believable! The bank took $50k less than they were owed!!!! On a $125k house!

Our bank is getting a touch sensitive to the no-money-down gig but the other house just appraised for $99k so the numbers should be fine. If these deals keep showing up though we may need to find someone with some cash to put up and share the fun. This is a shame as these places are a college plan for our kids and splitting things 3 ways would be tough. Of course the flip side is if the house sits empty for 3 months there are two of us to carry it. And rent WILL cover the entire note and probably even a touch more.

Funny thing about todays economy though, our realtor who probably owns $10m in investment properties and does it right (cash flow works, etc) says to me 'Hey, if it all goes to **** you can always live here!'. Sign of the times i guess. Nobody was thinking like that a few years ago.

jhynesrockmtn · 01-01-2009, 06:34 AM

Nice job, sounds like you are doing this right. What's your cash flow on something like this?

I wish I had some cash. There are some good deals out there. Of course the little I could have is tied up in a house my ex owes and I won't see anything until it sells. In this market, that's not happening.

unclebilly · unclebilly's Garage

i just don't understand how banks can take these huge write downs. I bought a repo'd 5th wheel trailer in 07 where the bank was still owed $75k on it. I got it for just over $20k.

I can't see how they will ever collect the $55k plus disposal costs from the previous owner. The loan crisis applies to more than just mortgages.

Fishman7 · 01-01-2009, 07:02 AM

Time for another shotgun berettafan!

LeRoux Strydom · 01-01-2009, 07:05 AM

Quote:

Originally Posted by unclebilly

i just don't understand how banks can take these huge write downs. I bought a repo'd 5th wheel trailer in 07 where the bank was still owed $75k on it. I got it for just over $20k.

I can't see how they will ever collect the $55k plus disposal costs from the previous owner. The loan crisis applies to more than just mortgages.

Didn't your government just spend $ 700b to prop up these deals? The bank is probably happy to offload the property and to collect the balance from the taxpayer.

ruf-porsche · ruf-porsche's Garage

Quote:

Originally Posted by berettafan

Small rancher was purchased for $125k 2yrs ago. Bank recently took it back and listed it for $100k (probably was listed for more before we saw it). A sharp realtor friend sends out emails with bank owned property listings and this was in one of them.

It happens to be across the street from a rental property my partner and I (business partner you sick bastards) own and is nearly identical. We happily paid $92k for the other home about 3yrs ago.

Long story short this place (3br/1ba) is in better shape and we got it for $75k.

Un-freaking-believable! The bank took $50k less than they were owed!!!! On a $125k house!

Our bank is getting a touch sensitive to the no-money-down gig but the other house just appraised for $99k so the numbers should be fine. If these deals keep showing up though we may need to find someone with some cash to put up and share the fun. This is a shame as these places are a college plan for our kids and splitting things 3 ways would be tough. Of course the flip side is if the house sits empty for 3 months there are two of us to carry it. And rent WILL cover the entire note and probably even a touch more.

Funny thing about todays economy though, our realtor who probably owns $10m in investment properties and does it right (cash flow works, etc) says to me 'Hey, if it all goes to **** you can always live here!'. Sign of the times i guess. Nobody was thinking like that a few years ago.

Take a moment to think about the family that use to live there, but lost their dream house because of the economy.

After the civil war there was a term for people like you

Carpetbagger.

TGTIW · 01-01-2009, 07:34 AM

You're assuming quite a lot. Why should Barrettafan feel bad, perhaps the previous owners lost the house because of a few bad drug deals? Or maybe the previous owner is now serving a jail term? Lots of reasons out there..

LeRoux Strydom · 01-01-2009, 07:35 AM

Quote:

Originally Posted by ruf-porsche

Take a moment to think about the family that use to live there, but lost their dream house because of the economy.

After the civil war there was a term for people like you

Carpetbagger.

Taking out a loan that you cannot afford to service, is as good a reason as any to lose your house.......

competentone · 07:41 AM

Quote:

Originally Posted by ruf-porsche

Take a moment to think about the family that use to live there, but lost their dream house because of the economy.

After the civil war there was a term for people like you

Carpetbagger.

How do you know that the family that used to live there wasn't trying to live beyond their means? Or perhaps the previous owner(s) were speculators planning on "flipping" it for a quick profit?

A lot of people losing their houses (probably most) never deserved them in the first place -- they couldn't actually afford to own the homes they bought.

It was the artificially low interest rates and lax lending standards -- the result of the Fed's policies and banks' lending behaviors -- and the choices of the borrowers, that allowed people to act out "their dreams" when they never did the hard work required to really achieve dreams.

People were living a lie; people being forced back to reality, losing homes to those who can actually afford them, isn't anything "wrong."

SLO-BOB · 01-01-2009, 07:40 AM

Quote:

Originally Posted by ruf-porsche

Take a moment to think about the family that use to live there, but lost their dream house because of the economy.

After the civil war there was a term for people like you

Carpetbagger.

According to Wikipedia, that's a compliment.

You can't possibly be judging berretafan harshly over this, can you? The bank took the house not bf. Also, you don't know the house's history. For one - a $125k "dream house"? Maybe. But....., maybe it was a failed investment. Maybe it was owned by someone who died. Maybe it was a college kid who let things slip. Maybe it was a family trying to live the American dream and they all had those big, "Precious Moments" eyes with a single tear running down their cheeks as they were ushered out into the cold by the man. There are a lot of maybes. Regardless, the house was for sale, the previous owner(s) were long gone, and bf bought it. Good for him. Maybe the former owner can rent it from him for less than they were paying before.

SLO-BOB · 01-01-2009, 07:42 AM

Wow-I'm slow on the keys! I think we all jumped on that one!

Dantilla · 01-01-2009, 08:00 AM

I'm looking at a waterfront home right now that is listed for far below what was owed.

The bank has already reposessed it, and it is sitting, empty. If I buy it, I will be displacing no one. In this case, the bank is hurting, and the price keeps dropping.

I might buy it for my family, or I might go buy a couple more smaller rental homes.

cl8ton · 01-01-2009, 08:21 AM

As home owners…we should thank berettafan!

The last thing I would want is a local house falling into disrepair
Sounds like he will keep the house in good shape!

Good job...

azasadny · azasadny's Garage

You could buy the entire state of MI really cheap right now, assuming of course, that you would want it...

turbo6bar · 01-01-2009, 08:53 AM

Quote:

Originally Posted by unclebilly

i just don't understand how banks can take these huge write downs.

The banks don't have a say, and they can't absorb the losses. This is the result of credit expansion gone wild.

Quote:

Originally Posted by ruf-porsche

Take a moment to think about the family that use to live there, but lost their dream house because of the economy.

So your solution would be??? Vultures allow the carcass to be eliminated. Vultures take distressed assets and turn them into performing assets. Vultures help banks reduce non-performing inventory, which eventually allows banks to extend credit. Vultures have access to funds and credit that are not available to most individuals today. The result is that asset pricing hits a bottom as valuations hit fundamental levels. Without vultures, this bottoming process would take longer, if at all.

ruf-porsche · ruf-porsche's Garage

Quote:

Originally Posted by SLO-BOB

According to Wikipedia, that's a compliment.

You can't possibly be judging berretafan harshly over this, can you? The bank took the house not bf. Also, you don't know the house's history. For one - a $125k "dream house"? Maybe. But....., maybe it was a failed investment. Maybe it was owned by someone who died. Maybe it was a college kid who let things slip. Maybe it was a family trying to live the American dream and they all had those big, "Precious Moments" eyes with a single tear running down their cheeks as they were ushered out into the cold by the man. There are a lot of maybes. Regardless, the house was for sale, the previous owner(s) were long gone, and bf bought it. Good for him. Maybe the former owner can rent it from him for less than they were paying before.

Maybe it was a home own by a family like this

Quote:

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.

Haven't been a fan of Xmas for the last 2 decades. Now it's more hassle than anything else.

No I'm not judging berettafan, only God can do that, I'm only ask that he just think about the people that might have live there.

turbo6bar · 01-01-2009, 09:22 AM

Quote:

Originally Posted by ruf-porsche

No I'm not judging barettafan, only god can do that, I'm only ask that he just think about the people that might have live there.

And where were you when millions of families were buying overpriced homes whilst having questionable credit worthiness? Who was thinking about these people in 2004? Eventually, great dreams must be aligned with reality.

We should be ashamed for letting the housing market get so blindingly stupid. We were living a Ponzi scheme of epic scale.

ruf-porsche · ruf-porsche's Garage

Quote:

Originally Posted by turbo6bar

And where were you when millions of families were buying overpriced homes whilst having questionable credit worthiness? Who was thinking about these people in 2004? Eventually, great dreams must be aligned with reality.

We should be ashamed for letting the housing market get so blindingly stupid. We were living a Ponzi scheme of epic scale.

Same place as YOU, Living the good life.

Fishman7 · 01-01-2009, 09:36 AM

More power to Berettafan for taking a "for sale/foreclosed" house off the market! He has done nothing wrong, in fact he is the fix to the crisis that we are in.

therotman · 01-01-2009, 09:38 AM

Quote:

Originally Posted by ruf-porsche

Maybe it was a home own by a family like this

No I'm not judging barettafan, only God can do that, I'm only ask that he just think about the people that might have live there.

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.......