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Griswold -> RE: "Mortgage crisis overwhelming credit counselors" (3/25/2007 4:55:19 PM)
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quote:
ORIGINAL: Jack45
The way around this that I have noted is that immigrants whether they are illegal or legal, buy a home and have several families living in it.
Excellent.
This touches on a point made by others, along the lines of people buying more than they should have, and as I said in a previous post, those who didn't read the loan docs as well as they could have, paid too much on interest among other things....(along with assuming their income would rise as fast as their mortgage payment, etc.).
People like those the OP talks about above are doing what your grandparents did 30 - 50 years ago. They don't believe that solely because they make X dollars a year that they "deserve" some level of comfort expressed in TIME magazine or some other preposterous news article. They actually think they're supposed to strive for, work hard for, and have fewer new cars every 2 - 4 years because of...the need and desire to move a few steps forward.
And they're willing to take a few steps back to get it.
I bought a pretty big place a few years back (it was huuuuge financial leap for me)...had two houses on it, and a really big separate garage. It's in a decent area, a bit rural for my tastes, and it needed some TLC, but...it's 7 minutes from my work and the fact that I was able to see an income waiting to be tapped in it...made me jump on it.
I rented out the main house as soon as I moved in, and being a single guy I had no problem taking the smaller of the two for myself and 2 cats. 2,900 square feet (the main house being 4,600 square feet) seemed just fine to me. The larger house, rented, paid 80% of my mortgage. I'd put 5% down.
Now, when you consider that I must have gotten an incredible deal, understand that my income didn't support the deal. I did a 5 year private contract with the previous owner, sweated like hell every night for almost 3 years because my (total) income barely covered the payment, and I worked a lot of nights getting the place in rentable shape.
A year after I bought the place I took the very meager caretaker unit in the garage (that hadn't been rented during this time) and busted out a few walls, turned it into a very nice one bedroom apartment, and over time got the rest of the property painted, paved some driveways for each residence, and now, 5 years after I bought the place, it actually (finally) looks like a nice place to live, my tenants pay all of my mortgage and taxes, plus give me about $650.00 a month spare on top of everything.
In short, I now pay less than nothing to live here...and I get 5 acres to sit out in at night and look at the stars.
I truly feel for those who are getting their homes reposessed, and I feel for those who find it difficult to get started...it's awful what they're going through, but the simple facts are, something like the above can be done every day of the week...in markets where prices are far too high to make sense of...and in markets where homes are being given away by the banks.
I've said it to many friends; there's no such thing as a bad time to buy real estate.
I'll amend that to say...there are times where a lot of bad deals get done (and they're done in good times, as well as bad), but they're done by people.
Many of those same people are in the headlines today and their deals are unfolding now.
Their problems aren't (typically) because of bad or unscrupulous mortgage company's, they aren't due as much to overpriced markets as they are to one very simple factor: Bad planning, poor conception and inadequate forward thinking.
And as importantly...people who (often...not always) think of themselves first...not their future.
Shit happens to everyone.
Less shit happens to those who hope for the best, but prepare for the worst.
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