Join John Adams, world renowned Intl Matchmaker, Thurs nights 8:30 EST for Live Webcasts with FREE Prizes!
And check out Five Reasons why you should attend a FREE Live AFA Seminar! See locations and details.


Scam free! Check out Christian Filipina - Meet Asian women with Christian values! Members screened.
Exclusive book offer! 75% off! How to Meet, Date and Marry Your Filipina Wife



View Active Topics       Latest 100 Topics       View Your Posts       FAQ Topics       Switch to Mobile


Who got rich from the housing bubble

Discuss culture, living, traveling, relocating, dating or anything related to North America. For those looking to relocate within the US or Canada, discuss your experiences and pros/cons of each domestic region.

Moderators: jamesbond, fschmidt

Who got rich from the housing bubble

Postby momopi » Wed Apr 28, 2010 4:30 pm

Yesterday I found a great example of what people did to abuse the system during the housing bubble. You can read about the HELOC abuse here:
http://www.irvinehousingblog.com/blog/c ... t-time-fo/

Here we have someone who bought a house for $350k in 1997.

From 2000 to 2006, the home buyer withdrew $771,900 in mortgage equity, TAX FREE. Yes, that's $772K, TAX FREE, into his pockets during the 6-7 year span.

Now he owes $1 million debt on the property, what does he do?

Stop paying.

And he's going to get away with it.

But, wait, there's more! He gets to live there for 18+ months free while the home goes under foreclosure, and all he has to do is wait 2 years before he can buy another house and wait for the next rally!

Who gets to pay for his $772k spending-spree? Not him, and not the bank (and its shareholders) that made the easy loans to him -- they just cry to the government and ask for a bail-out. So you and I, end up paying for it from our tax dollars.

There's nothing we can do about it either. We demanded the government to "help" and the consequence is that we reward people for being financially irresponsible, or even abusing the system for financial gain.
momopi
Elite Upper Class Poster
 
Posts: 4707
Joined: Sat Sep 01, 2007 4:44 am
Location: Orange County, California







Postby globetrotter » Wed Apr 28, 2010 5:32 pm

The REALLY smart people owned before 2002. They rode the bubble and either flipped many houses or sold theirs in 2005 and at huge profit to The Greater Fool who bought at the top. When they saw the Time 'Housing' cover and the housing doomer bloggers startup they sold, bolted and are sitting on a beach or in Buenos Aires. I was saving for a down payment in 2003-2005. I looked around and realised that things were f***ed up. I did not buy.

This saved me about $350,000 and being tied to a house. Sure I could live rent free, not pay my mortgage, rent rooms to suckers, but I would be stuck in Los Angeles. Nope, better for me to be free and clear.
globetrotter
Experienced Poster
 
Posts: 1023
Joined: Fri Nov 20, 2009 7:45 pm
Location: Someplace Other Than This Forum

Postby Contrarian Expatriate » Thu Apr 29, 2010 9:19 pm

I bought my portfolio of properties between 2000 and 2003. I sold half of it in 2006 at a big profit, but two more remain.

Had I sold them late in the bubble, I would have been a genius, but I now have them rented out with modest positive cash flow so I'm in no hurry to sell.

Some of the money in the profit (20 percent) I lost in a vulture fund for distressed real estate, but the final verdict is still out on that since I'm obligated until 2014.

Real estate is timing and a bunch of other things. Never get too greedy and get in and out before the rushes.
Feel free to visit my sites and to leave your respected words of wisdom:

http://thedeclineofmyamerica.blogspot.com/

http://www.youtube.com/user/ContrarianExpatriate
Contrarian Expatriate
Experienced Poster
 
Posts: 1404
Joined: Thu Dec 03, 2009 5:57 am

Postby momopi » Thu Apr 29, 2010 11:53 pm

Here's another lesson that I learned: if you flipped properties and made out like a bandit during RE highs, hold on to your money in CASH and wait for the crash. After the bubble goes pop, CASH is KING. Don't "park" the money in stocks or mutual funds. Just CASH. Stocks are way cheaper post-crash. ;p

I made the mistake of "money burning a hole in pocket" syndrome and ended up losing a chunk of money. Of all the stupid things that could happen, the transport company dropped a CNC machine that I paid for and wrecked it. I might see some insurance money any years now, yeah... right.

I had dreams about making my own gun parts. So much for that idea. LoL.

http://www.homegunsmith.com/
momopi
Elite Upper Class Poster
 
Posts: 4707
Joined: Sat Sep 01, 2007 4:44 am
Location: Orange County, California

Postby FuzzX » Fri Apr 30, 2010 10:42 am

sorry to hear that momopi... I bought Tshirt + Hat Presses and Button Makers... I think business equipment is always a wise investment. Anyway, my cousin thought he`d play the housing market and bought a big beautiful house when he started his `career`in the factory. He and his loving girlfriend and their 2 dogs all lived happily until he started to have some mental problems from too many years on the factory floor. Unfortunately, he couldn`t afford to quit his job as the payments for the house were just too much. Not long after his girl left him and stuck him with the 2 huge dogs... both dogs completely ruined the insides of the house and now he`s trying to get rid of it. More than likely he will be selling at a huge loss + debt trying to fix it up.

I don`t see real estate for the majority being a good investment, most people are not responsible enough to take care of their most important assets.

Momopi: Have you thought about going to Shenzhen to look for another machine(question mark)
FuzzX
Freshman Poster
 
Posts: 186
Joined: Tue Mar 02, 2010 10:59 pm

Postby momopi » Fri Apr 30, 2010 3:39 pm

FuzzX wrote:sorry to hear that momopi... I bought Tshirt + Hat Presses and Button Makers... I think business equipment is always a wise investment. Anyway, my cousin thought he`d play the housing market and bought a big beautiful house when he started his `career`in the factory. He and his loving girlfriend and their 2 dogs all lived happily until he started to have some mental problems from too many years on the factory floor. Unfortunately, he couldn`t afford to quit his job as the payments for the house were just too much. Not long after his girl left him and stuck him with the 2 huge dogs... both dogs completely ruined the insides of the house and now he`s trying to get rid of it. More than likely he will be selling at a huge loss + debt trying to fix it up.

I don`t see real estate for the majority being a good investment, most people are not responsible enough to take care of their most important assets.

Momopi: Have you thought about going to Shenzhen to look for another machine(question mark)



Sorry to hear about your cousin. If he's upside down on the house and looking to exit, tell him to read "Irvine Housing Blog" for some ideas. They call it "strategic defaulting". >_<

If his job is making him feel ill, it's time to quit and do something else.

I haven't thought about buying manufacturing equipment in Shenzhen... after the last fiasco I think I'm done for a while, lol.
momopi
Elite Upper Class Poster
 
Posts: 4707
Joined: Sat Sep 01, 2007 4:44 am
Location: Orange County, California


Return to North America, Domestic Relocation

Who is online

Users browsing this forum: No registered users and 1 guest