El Pinko
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Fri Feb-22-08 12:52 AM
Original message |
San Diego: Novice Landlords Pinched Between Outgoing Payments and Rents |
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Lela Mazzeo talks about her home financing dilemma while her mother-in-law Deana Dawson sits nearby and daughter Marley plays in the downstairs of the Mazzeos' property. Photo: Sam Hodgsonhttp://www.voiceofsandiego.org/articles/2008/02/21/housing/891rent022108.txtNovice Landlords Pinched Between Outgoing Payments and Rents By KELLY BENNETT Voice Staff Writer
Thursday, Feb. 21, 2008 | The two-story house on a large lot in Casa de Oro -- on the less expensive side of the La Mesa border -- has been listed for sale for three months. The Mazzeos haven't lived in it since 2003, when they bought and moved into a home in Imperial Beach. They kept the Casa de Oro house, renting it at first to friends and then to long-term tenants. The last tenants moved out in December 2006, leaving the Mazzeos to 11 months and at least $75,000 of cleanup and renovating before they deemed it sellable.
But even when they had tenants, the rent the house garnered -- $2,000 to $2,100 -- fell far short of the nearly $4,000 the Mazzeos paid each month on its mortgage and upkeep. And since listing it for sale in November for $575,000, they've dropped the bottom of the asking price range to $499,000, less than they owe. They bought this house in 2001 and have accumulated four more properties, including the house in La Mesa where they live now.
This home in Casa de Oro isn't appreciating the way it once did, the way they counted on it doing when they refinanced to buy other properties. And they can't get enough rent to sustain their payments in a down market. "It's just a matter of how many we lose before we get to a place where we're sound financially," James Mazzeo said last Wednesday as he waited for his appointment with a lender rep at a foreclosure clinic. "It's been like a really long rollercoaster -- just down. Just falling, falling, falling."
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But even though the $500,000-range asking price is more than $200,000 more than they paid for it in 2001, selling it for that much wouldn't let them break even, because of the repairs they've made and because they owe about $500,000 on it.How much you wanna bet that these fools bought into the whole Dave Del Dotto "Cash Flow" Get-Rich-Quick Real Estate pitch on the infomercials? How many more of the subprime & equity-loan crash vicitms/perpetrators bought into the same illusion?
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MercutioATC
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Fri Feb-22-08 01:00 AM
Response to Original message |
1. Sounds like a Carlton Sheets "investor" to me. |
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There is no good "get rich quick" program in real estate.
The fact that they paid $300k for the property and now owe over $500k suggests that they bought the property, reappraised it, and took about $200k in equity to finance other deals.
This is NEVER a good thing.
Forget what a fantastic real estate market can do. A good real estate investor works with bulletproof strategies.
These people played in the big pond and got burned. IMO, they deserved it.
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El Pinko
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Fri Feb-22-08 01:07 AM
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2. Yes, but there were so many of them that we all end up getting burned... |
MercutioATC
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Fri Feb-22-08 01:20 AM
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3. Indirectly, yes. That's unfortunate. |
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They're getting burned to a much greater degree, however....for being stupid.
...it's a small thing, but we can take solace in that.
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Adsos Letter
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Fri Feb-22-08 01:42 AM
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4. I wonder if there isn't a hint of the Mazzeo's general financial sense... |
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in the fact that, amidst their financial woes, she is purchasing a (Starbuck's?) coffee; how much do those little gems cost?
I understand that, in terms of their bigger financial picture, the coffee is a miniscule thing...maybe even a cheap morale booster.
Still, it may just speak volumes about larger issues... :shrug:
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El Pinko
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Fri Feb-22-08 01:50 AM
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5. Definitely. I consider myself a coffee lover... |
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...so I go to Costco to buy beans as cheap as I can to make my own. No WAY I would buy that overpriced crap at Starbucks.
I'm sure these people probably eat out 3-4 times a week and drive 2 leased late-model import cars, too.
DUHHHHH
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Adsos Letter
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Fri Feb-22-08 01:55 AM
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7. And Costco coffee is just fine...drink it here daily... |
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funny thing is, we even have our own reusable "takeout" cups right here in the kitchen, too... :D
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Jack_DeLeon
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Fri Feb-22-08 01:54 AM
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6. you hit the nail on the head... |
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Edited on Fri Feb-22-08 01:55 AM by Jack_DeLeon
I dont exactly feel sorry for people who upper middle class WASPs or the like, who made bad financial mistakes when there are so many people working day after day grinding out a meger existance.
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earth mom
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Fri Feb-22-08 05:51 AM
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8. As sorry as I am for people who are losing their homes to the housing crisis... |
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I just can't feel sorry for house flippers who were so greedy that they find themselves hanging on to 4 overpriced properties-no less!
All while holding an overpriced cup of Starbucks coffee while they're at it! :nopity:
p.s. Anyone notice that the mom sitting on the stairs in the background looks disgusted and fed up? Speaks volumes if you ask me.
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SoCalDem
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Fri Feb-22-08 06:01 AM
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9. Waaah.. Poor stupid babies.. they "accumulated 4 more properties" |
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These dolts need to sell ALL they can, for whaever they can..and take their lumps..and THEN buy ONE house (if they can) that they can live in and afford..
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salin
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Fri Feb-22-08 06:04 AM
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10. Refinancing for far more than one originally pays |
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is foolish. Why does the media primarily focus on these folks? About two or three years ago, stories focused on the predatory lending practices used in low income urban areas where long-time owners (often older) faced with financial emergencies (often medical) were sold refinance deals that exuded fraudulent practices (e.g., not explaining resetting rates) - who were suddenly losing their homes - and stories were feds were preventing states from passing and acting on laws to prevent such predatory lending practices. If we were just to read the current stories we would think that the old problem of predatory lending has disappeared. It hasn't. It is just easier to try to frame the current crisis as one of greedy and foolish borrowers. A major part of the current crisis/story has suddenly disappeared from the media coverage.
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El Pinko
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Fri Feb-22-08 06:37 AM
Response to Reply #10 |
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Predatory lending was definitely a big part of the crisis.
but greedy flippers and big-spenders using equity as an ATM were certainly not insignificant in all of this.
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Mugu
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Fri Feb-22-08 07:39 AM
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12. Fools always think that there is an easy way to get rich. n/t |
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