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Are the property owners from this site in trouble?

hatterasguy

Bronze Contributor
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Jul 29, 2008
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So someone possibly went under. That is exactly why I started this thread. I'm still confused how someone with so many assets goes under. Especially with low overhead.


I don't want to speak for him but the way I read his posts is he had a lot of debt. He also had a lot of toys, if I remember correctly quite a few exotic cars.

I actualy just had a discussion about this with my uncle the other day. I found a pretty good 4 unit deal I wanted to leverage myself into with him. But he said its not worth it if you don't have the cash. He is right. If I took out a $250k mortgage the rent would barely cover the note, I'd get a few hundred bucks a month out of the thing if it was fully rented. If rents dropped I'd be under water. He cautioned me and said that I would be better off building for a bit and buying something when I had enough cash built up. Thats how he did it.
 
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hakrjak

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Sep 15, 2007
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Just to play devil's advocate for a minute...did you project rates to go down further and that's why you took an adjustable rate mortgage? Would you still be in business if rates had gone the other way significantly?

I did predict rates to keep declining or to atleast hold steady for a lengthy period of time, even when others have been predicting rises for 10+ years now. If things had gone the other way, it would be have been painful for me. Might have knocked me completely out of business, and out of a home. If I ever see signs of increases coming, I'll lock in quickly... But it's not worth it to lock in before, because it seems like ARM rates are always about 2-4% below 30 yr fixed rates! (Once they have adjusted, not before -- If tied to LIBOR) Especially if you are sitting on ARMS that were set up when you were an owner occupant.... My god the savings are huge!

Cheers,
- Hakrjak
 

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