'Extreme Makeover' home in foreclosure. Family used it as collateral for $450,000 loan

[Liberal_in_LA]

Why in the heck would a family need to pull $450K out of their home? (on Edit... I see they used it for loan to start business that failed).

http://www.breitbart.com/article.php?id=D927JS2O0&show_article=1

'Extreme Makeover' house faces foreclosure

Jul 29 11:54 AM US/Eastern


LAKE CITY, Ga. (AP) - More than 1,800 people showed up to help ABC's "Extreme Makeover" team demolish a family's decrepit home and replace it with a sparkling, four-bedroom mini-mansion in 2005.
Three years later, the reality TV show's most ambitious project at the time has become the latest victim of the foreclosure crisis.

After the Harper family used the two-story home as collateral for a $450,000 loan, it's set to go to auction on the steps of the Clayton County Courthouse Aug. 5. The couple did not return phone calls Monday, but told WSB-TV they received the loan for a construction business that failed.

(*** snip***)


Some of the volunteers who helped build the home were less than thrilled about the family's financial decisions.

"It's aggravating. It just makes you mad. You do that much work, and they just squander it," Lake City Mayor Willie Oswalt, who helped vault a massive beam into place in the Harper's living room, told The Atlanta Journal-Constitution.

___

[gatorboy]

1. I just hope they didn't squander their kid's scholarship money as well.

[Sanity Claws]

2. $450K loan??

I wonder where that money went.

[aquart]

3. I read that they used it to start a construction business that failed.

[Sanity Claws]

6. That's a lot of money

I know it takes money to make money but surely they could have started a decent business with $100k.

[Greyhound]

13. I don't know how many businesses you've started, but $450K is not much at all.

A "construction" business requires significant capital for equipment and materials, add in the fees licenses permits and inspections, specialized help such as an accountant and attorney, and the list goes on and on. You can go through $450K in a couple of months, and that doesn't even begin to factor in the costs of "competition" (you might have heard that many in that business are not constrained by ethics or legalities) which can cost tens or hundreds thousands of dollars.

If anything, they were severely underfunded and it sounds like they didn't have much of a clue about entrepreneurship in Amerika. They broke all of the rules and have now paid the price for it.

[Sanity Claws]

14. Isn't the equipment rented?

I know the equipment is very expensive but I thought it was rented.

[Greyhound]

23. I don't do construction, but in real estate management rentals are far too expensive

for anything except a one-time exception. Anything you use regularly is leased or purchased depending on depreciation and/or lease deductibility.

There are many different businesses that require much less capital but construction is not one of them.

[Blue_Tires]

4. more info in LBN

http://www.democraticunderground.com/discuss/duboard.php?az=view_all&address=102x3412841

[intheflow]

5. I've always wondered how these worthy but impoverished families

can even afford the taxes on these "Extreme Makeover" mega-mansions. That's what I thought this story was about. But really what bank would give them a loan to start a construction business in the first place? If they had any construction experience, they probably would have done something to fix up/expand/whatever their original house, wouldn't they? Building materials can be found cheap enough to do a little at a time over time...

[SmileyRose]

8. They were given a 15 year tax abatement.

Well technically I think it was a homestead exemption. They were paying property taxes based on the estimated value of what the old house would have been, based on neighborhood values.

[intheflow]

10. Thanks. n/t

[SmileyRose]

7. I live 3 blocks away.

The whole neighborhood knew this would happen before it even started. This family was messed up a LONG time. PLUS This is a whole neighborhood full of homes in the $90-130,000 range, all under 1500 sq ft. You should see this monstrosity. Granted we hoped the best for Harpers and pretty much everyone helped work on it, and those that didn't patiently bore major inconveniences for 3 weeks. But we knew they wouldn't be able to keep the house and good luck selling it.

I hate that damn show with such a hot burning passion and quite frankly would love to punch the city and county right in the chops for approving the permits.

[intheflow]

9. Have the neighboring property taxes risen as a

consequence of having this mansion in the neighborhood?

[SmileyRose]

11. MY appraisal went DOWN.

Our schools are in major deep shit and so many people here are either in foreclosure or are desperately trying to sell to get out of the county because of schools that it's pushed our values down. It's not the housing bubble popping since we never bubbled in the first place. Other than a mansion that has very little chance of selling probably sitting vacant for decades turning into a crack house (I hope I'm proved wrong) the thing has not really affected our neighborhood.

We all love the Harpers, really. But they have serious problems that a house like was bound to only make worse. We all wished the same money had been spent on helping them solve their issues instead.

[intheflow]

12. I think about all the McMansions being built

here in Denver and not selling. Even the ones that sold quickly 2 or 3 years ago are back on the market now. I keep seeing them as turning into apartment buildings, like so many Victorian homes in so many cities and towns throughout the country. But you're right... those Victorians often have to become so run down/turned into drug houses that eventually the only way for them to be reclaimed is by turning them into low-income, multi-family housing.

[SmileyRose]

18. Victorian houses had some meat on them. This thing is flypaper and fiberglass.

Whoever eventually buys this things is one day going to end up a moneypit.

[intheflow]

20. Well...

having lived in Victorian or older homes most of my life, I can attest that the older homes can be moneypits, too. But I know what you mean. It does seem like these McMansions are built to be disposable, the same quality materials that was used on low-income housing projects built in the '70's, and many of those places are falling apart now, just 30-odd years later. More so in humid areas.

[ThatsMyBarack]

15. Do you hate that show for the same reasons I do?

It's just so....Freepish. I mean, they had LAURA BUSH on it as a guest star. :puke:

[SmileyRose]

17. I was never a big fan of the show to begin with

The first couple shows spent so much time sensationalizing the hardships of the families, and these designers falling apart into tears just watching a video. It was just too fakey bullshit for me.

We knew the Harpers had been nominated for a house and quite honestly, all of us were praying they'd get turned down. It's not that we didn't care about the Harpers, it just that we knew whatever ABC put in this neighborhood it would be incredibly out of place. But when the advance ABC people started knocking on door my family was right out front to help. Why not. Lord knows the Harpers could use a break. We hoped it would make a difference for them.

This neighborhood was absolutely stomped on. Our yards torn up beyond all recognition, massive inconveniences trying to just be permitted to drive our own car into our own driveway with a load of groceries (the cops blocked the neighborhood off the better part of 3 weeks), media people accosting our children for comments, and "volunteers" urinating in our bushes.

I know I sound like a raging bitch. Believe me, I hate that show with the blaze of a thousand suns and the city and county can bite me on the stinky places too.

[elehhhhna]

21. Their pre- homemakeover story makes no sense --

unless they paid cash for the original home, their mort. co. would have demanded they carry homeowners insurance...which would have covered the sewage backup AND the tree falling through their roof.



"After putting in long hours and saving up every penny they had, the Harpers packed up their kids and bought their first home, a 1400 square-foot, four-bedroom ranch house just outside Atlanta.

What these first-time homeowners didn't know was they had just bought a big dump -- literally. Unaware of any problems when they purchased the home, the Harpers soon found themselves knee-high in raw sewage! Every time it rained hard -- which was often -- their septic tank would back up and human waste actually flooded their suburban home. The Harpers have been living in and out of their minivan because of bacteria in the house, not to mention the horrible stench that has damaged their possessions. Their furniture, clothes and even their dreams have all been ruined. Recently their minivan was in an accident, so even that shelter was taken from them. They tried to fix up a couple of the rooms in their house to live in, but were dealt yet another blow when another rainstorm produced a gaping hole in the ceiling of one of those rooms."



http://realitytv.about.com/od/extrememakeoverhome/ss/HarperMakeover.htm

[elehhhhna]

22. Sounds like rather than selling (impossible) they chipped out the cash & ran...?

[SoCalDem]

16. That show is nothing more than an infomercial for the "donors"

If they wanted to truly help people, they would re-roof ALL the houses in a poor area, re-paint them & fix them up a bit..for less than what those "dream houses" for ONE family..

or retain ownership in the "new" house, with the people living in them as long as they need to..that would preclude them from using it as an atm, or selling it for profit a year later..

It's a SHOW, people.... using poor, unfortunate people as a tear-jerking draw... We get to live vicariously through them, and all we have to do is to weep a bit, and run down to Lowes & buy some tile, or to Sears for some drill bits, so they can keep being "angels" to poor folks :puke:

[AlCzervik]

19. also when they redo these house or rather tear them down and then build

something 3 times the size the homeowners are going to be dealing with much larger utility bills and maintenance issues and the homeowners are already just barely keeping their heads above water so i would think the new much larger home might be a blessing and a curse.

Why not just build something a bit larger and maybe not as tricked out? From what i've seen of the majority of families that appear on this show need a functioning home, not a huge home but one they can live in and afford to keep up.

I'm sure that would really take the zazz away for abc.