We all complain about the prices in Irvine — which are ridiculous and will continue to fall — but many of these overpriced properties are very attractive homes and beautiful places to live.
Pretty woman walkin down the street Pretty woman, the kind I like to meet Pretty woman, I dont believe you Youre not the truth No one could look as good as you Mercy
Today, as we look over this beautiful Irvine home, I thought I would tell you the history of Irvine home prices in pictures.
The Home Price Story
Once upon a time, a prospective homeowner sought his dream home. It is a fearful and daunting task.
After much deliberation and bidding wars which forced him to overpay, our intrepid home owner paid a price in the clouds, but he is happy and enjoying life.
A wicked recession hits and the support for this homeowner’s resale home price begins to erode.
After a time, there is no support, and all the sustains prices is the air from The Great Housing Bubble.
{book3}
Everyone in the industry thought it would go on forever…
Beds: 4 Baths: 5 Sq. Ft.: 4,600 $/Sq. Ft.: $402 Lot Size: 10,277 Sq. Ft. Property Type: Single Family Residence Style: Contemporary Stories: 2 View: Pool Year Built: 1999 Community: Northwood County: Orange MLS#: S588025 Source: SoCalMLS Status: Active On Redfin: 8 day
One of the finest homes ever to be offered in the prestigious community of Rosegate. Built by Taylor Woodrow, this spectacular former model home creates an atmosphere of casual elegance while providing ultimate privacy. Designed with an easy flow through out the home, this versatile floor plan will suit any lifestyle. Appointed throughout with the finest of upgrades, no detail has been overlooked. In addition to four bedrooms there is an office on the main level and a bonus room on the upper level. Soaring ceilings and plenty of windows allow for an abundance of natural light throughout the home. Fireplaces are found in the family room and formal living room as well as the master bedroom. Enjoy the ultimate in outdoor living. Oversized lot with salt water pool and spa, covered loggia with custom kitchen, built in barbeque, ceiling fans, heaters, mist system and fireplace. Outdoor shower completes this amazing resort style backyard.
One of the finest homes ever to be offered… Give me a break.
These owners are leveraged, but not to the degree their buyer likely will be. Do you think there are many people making $350K+ in this economy?
.
And so concludes another week at the Irvine Housing Blog, chronicling the Irvine home market since September of 2006.
I can see clearly now, the rain is gone, I can see all obstacles in my way Gone are the dark clouds that had me blind It’s gonna be a bright (bright), bright (bright) Sun-Shiny day.
I think I can make it now, the pain is gone All of the bad feelings have disappeared Here is the rainbow I’ve been prayin?for It’s gonna be a bright (bright), bright (bright) Sun-Shiny day.
Financial markets must discover a clearing price in order to find an equilibrium where prices no longer fall. When there is excessive spreads between the asking prices of sellers and the bids of potential buyers, the market has not found a clearing price, and prices will continue to fall.
When lenders enabled people to borrow whatever they wanted to buy houses, people were able to outbid one another for properties and drive prices up quickly. Once the toxic financing that enabled this to occur was removed from the market, borrowing power plummeted, and bids went down with them.
Sellers miss the memo, and their asking prices remain in a strange fantasy-land where the bubble never occurred.
The result is a widening of the spreads between bids and asks and a decline in transaction volumes. As we have seen here in Irvine, spreads can remain wide as long as transaction volumes are low.
If you look at the long-term chart of Irvine sales, you see that transaction volumes were steady from 2000-2005. Then in 2006, volume went on a three-year decline down to approximately 60% of its historic norms. That is where we are today. The market may seem “hot” due to the lack of available inventory, but the transaction volume says the market is anything but healthy.
Low transaction volumes and a large bid-ask spread demonstrates that buyers and sellers are not in agreement on prices. This standoff will continue until bidders raise their bids or sellers lower their asking prices. Since bidders are not likely to have access to toxic financing again soon, bids will not be going up. Asking prices will need to come down.
Bids do not firm up again until prices are at fundamental valuations because it is at these price levels where there are a large enough number of qualified bidders to increase transaction volumes and clear out the inventory. We are not there yet.
It isn’t a big mystery as to what needs to occur; prices must fall. Let’s examine a couple of low end properties trying to find bottom support.
{book1}
Asking Price: $183,900
Income Requirement: $45,975 Downpayment Needed: $36,780
Purchase Price: $300,000 Purchase Date: 6/4/2006
Gain (Loss) after 6% Commission: -$127,134 Percent Change: -38.7% Annualized Appreciation: -11.8%
Beds: 1 Baths: 1 Sq. Ft.: 639 $/Sq. Ft.: $288 Lot Size: – Property Type: Condominium Style: Bungalow Stories: 1 Floor: 1 View: Creek/Stream Year Built: 1977 Community: Northwood County: Orange MLS#: P702788 Source: SoCalMLS Status: Active On Redfin: 1 day New Listing (24 hours)
This is a great bank owned 1 BR, 1 BA unit in The Springs complex, nicely located for easy access and guest parking. This home is a lower end unit in good condition. The patio allows for outdoor BBQ’s. Granite counters in the kitchen. Breakfast bar and dining area. Running streams, community pool, spa, club house and tennis courts are within the complex. Property being sold in ‘as is’ condition. There is a $75 doc fee paid by buyer at closing. All offers are ‘subject to’ and ‘contingent upon’ final review and acceptance by the investor and/or mortgage insurer.
You and I own this one… well, more accurately, IndyMac owns this one which is owned by the FDIC which is supposedly funded by the banks, but we all know that the US Taxpayer will end up holding the bag. Therefore, we all own a piece of this loss.
As this one is only 40% off the peak, it still has further to fall.
{book7}
This second one will not be marketed as “light and bright.” Hmmm… It is marketed as LIGHT AND BRIGHT!
OMG! Did the realtor even look at the pictures?
I am speechless.
Asking Price: $204,900
Income Requirement: $51,225 Downpayment Needed: $40,980
Purchase Price: $322,000 Purchase Date: 6/3/2005
Gain (Loss) after 6% Commission: -$129,394 Percent Change: -36.4% Annualized Appreciation: -8.5%
Beds: 1 Baths: 1 Sq. Ft.: 715 $/Sq. Ft.: $287 Lot Size: – Property Type: Condominium Style: Contemporary Stories: 1 Floor: 2 View: Greenbelt, Treetop Year Built: 1980 Community: Woodbridge County: Orange MLS#: L30910 Source: SoCalMLS Status: Active On Redfin: 1 day New Listing (24 hours)
WOW..THIS IS AN OUTSTANDING VALUE FOR WOODBRIDGE! REO BANK OWNED UPPER LEVEL SPACIOUS ONE BEDROOM LIGHT AND BRIGHT CONDO IN PRESTIGIOUS WOODBRIDGE COMMUNITY CLOSE TO FREEWAYS, UNIVERSITY, AWARD-WINNING SCHOOLS, MAJOR SHOPPING AREAS, AND WITH LAKE AND ASSOCIATION PRIVILEGES! CLOSE TO PARKING AND WELCOMING VIEWS OF THE GREENBELT, THIS UPPER LEVEL CONDO IS AN END UNIT WITH A PRIVATE ENTRY BALCONY PORCH, VISTA OF TREES, A LARGE LIVING ROOM WITH WINDOWS ON TWO WALLS, A SEPARATE DINING ROOM, A SUNNY KITCHEN WITH UPGRADED COUNTERS, A LARGE MASTER SUITE WITH SMALL BALCONY PLUS A DRESSING AREA WITH A WASHER/DRYER CLOSET, AND A SEPARATE BATHROOM WITH SHOWER/TUB.
VISTA OF TREES. Hmmm… I imagine you can see them, too.
ALL CAPS.
Look at how long this one has been moving through the system:
Foreclosure Record Recording Date: 05/09/2008 Document Type: Notice of Sale (aka Notice of Trustee’s Sale) Document #: 2008000222010
Foreclosure Record Recording Date: 02/04/2008 Document Type: Notice of Default Document #: 2008000051931
Foreclosure Record Recording Date: 08/24/2007 Document Type: Notice of Sale (aka Notice of Trustee’s Sale) Document #: 2007000526514
Foreclosure Record Recording Date: 05/16/2007 Document Type: Notice of Default Document #: 2007000318854
This owner stopped making payments in late 2006 or early 2007. It was not foreclosed on until June of 2009.
Nobody has made a payment on this unit for as long as I have been writing for the IHB. Unbelievable.
When a mortgage holder gets behind on payments, they often “cure”
the deficiency — well, at least they used to. The cure rate in early
2007 was 45%; It recently fell to 6.6%.The
cure rate is the ratio of the number of loans cured divided by the
number of delinquent loans in the system. It is a measure of the
percentage of loans each month that leave Shadow Inventory. It is a
direct measurement of one of the methods of exiting the system — the
other being foreclosure. When a property goes delinquent, what isn’t
cured is a foreclosure.
Cure rates are very low right now because there is so much shadow
inventory in the system that has no chance of curing. This makes the
denominator of the calculation larger than it should be (Loans Cured /
Total Delinquent) because delinquent loans are not becoming REO on
time. There are about 15,000 loans in Preforeclosure Inventory that
should be REO but due to foreclosure moratoria and other policies,
Shadow Inventory (Preforeclosure Inventory plus REO) has been growing.
This is consistent with anecdotal reports I have heard.
Today, I want to take a closer look at cure rates and relate the micro-economic decisions of individuals to the macro-economic statistics.
Cure Rate and Equity
Defaults are loan disease. There are many causes of the disease, from unemployment to loss of market value, but there is only one symptom that lenders care about — defaults. There are two important dates concerning defaults; (1) the date when lenders consider a borrower to be a default problem which is 60 days after payment was due, and (2) the date when the Notice of Default is permitted to be filed which is 90 days after payment was due.
The lenders do not control the first date — when the borrowers actually quit paying — but they do control the second date — when they file a notice of default. What is customarily a 30 day gap has extended by months. Part of our famed Shadow Inventory is trapped in this moratoria gap.
Patients who are in good health cure from disease better than those in poor health. Borrowers whose finances are strong — have equity — will cure at better rates than those who are underwater or facing a rental savings enticement. Many who see better futures in different circumstances will walk away from the debts and succumb to the loan disease. In borrowers terms, the cure for loan disease is to quit paying.
Curing Default
There are many factors that influence who will cure their loan and who will not. One of the most important of these factors is their equity position.
When people have equity in their homes, they cure at very high rates. Either the loan officer will modify the loan, or they will force sale. The owner generally will choose to sell and obtain their equity to live on. If you have a borrower in default with a low Loan-to-Value (LTV), they will cure either by loan modification or open market sale at nearly 100% rates.
As LTVs get higher, percent equity or Equity Position gets lower. As the equity position gets smaller a number of negative factors work together to lower cure rates quickly:
Lenders feel less security extending credit.
Loan modifications are more difficult to obtain.
Success of loan modifications declines.
It becomes more difficult to sell, particularly when equity falls to zero.
Absent faith in appreciation, borrowers have little incentive to cure.
If savings by renting is reasonable, borrowers have incentive not to cure.
The combination of these factors means that cure rates fall off to nearly zero as homeowners go underwater. (BTW: We will have stories of people who bought in 2006 who paid their mortgages for 25 years to get back to the value they paid. These loan (lone?) survivors will be like the Japanese WWII veterans who come out of the jungle after all these years, and they are still fighting the war.)
The equity position changes as prices change. The more prices fall in a market, the more people default and fail to cure. This adds inventory which further depresses prices; a downward spiral ensues. Have you taken a careful look at the Case-Shiller Index for Las Vegas? You see exactly what happens when you hit the downward spiral.
If there is a reason for lender collusion to withhold inventory, it is their collective fear of recreating Las Vegas in every market in America. They have not begun to face the staggering losses they will take in Orange County.
Default Rates
Default rates would also graph very much like cure rates because the same reasons that people may not cure a loan are also reasons they may wish to default. Going underwater and having rent savings available will push and pull people out of their homes. Financially, it is often the right thing to do.
This means that house prices get a double whammy; when property owners go negative-equity, they (1) default and (2) fail to cure. They become ruthless incurable defaulters adding inventory to the downward spiral — like today’s featured property owner.
Asking Price: $655,000
Income Requirement: $163,750 Downpayment Needed: $131,000
Beds: 5 Baths: 3 Sq. Ft.: 3,450 $/Sq. Ft.: $190 Lot Size: 8,191 Sq. Ft. Property Type: Single Family Residence Style: Contemporary Stories: 2 Year Built: 1998 Community: Walnut County: Orange MLS#: P702865 Source: SoCalMLS Status: Active On Redfin: 1 day New Listing (24 hours)
In CUL-DE-SAC. Largest plan in complex. Huge drive way! Over $200k in upgrades with brand new re-designed kitchen and state of the art appliances. Re-built bathrooms upstairs and downstairs. Newly built opened stairwell unlike any other in this plan. Combination of hardwood & 22 inch Italian tile floors downstairs and all mahogany wood upstairs. Crown molding throughout entire home. Bonus HUGE loft with custom sink area for entertainment upstairs! 1 Bedroom downstairs that can be office and 4 spacious bedrooms upstairs, perfectly situated; all upstairs bedroom has walk-in closets!
The owner of this property put $230,000 down. That must hurt.
Looking to the sky to save the values in the towers on Jamboree? I don’t think there will be pennies from Heaven — dollars from Washington maybe — but the market for these units will continue to crumble. I first documented the problems in The Plaza in the post, School of Hard Knocks.
The owner of today’s featured property is learning a tough lesson as well. When the foreclosure went through, he lost his $295,600 downpayment. That must have hurt.
Just Say Nothing?
When I wrote last Friday’s post Good Karma, it was astutely pointed out that for every buyer I saved I made life more difficult for a seller. This is true. In my defence, I note that the seller already made their decision when they bought previously. The decision to sell is about mitigating consequences. It is the buyer who is agreeing to take on the consequences of the decision anew, and they deserve good information to make that decision.
Does educating buyers to consequences make it good and right to sellers? It works for me. I will let you decide for yourself. Isn’t choosing to say nothing and failing to help when you can an action for which you must answer to yourself?
The astute observation points to a deeper issue; what should the Cassandra’s of this world do? The School of Hard Knocks is expensive education. Would you dissuade buyers if you thought they were making a mistake?
I received the following from an anonymous reader:
Hello IHB,
I’m a renter in the Bay Area. One of my coworkers recently announced he was going to buy a condo. It’s a new building, just recently thrown up, and he announced he was purchasing a unit, 1300 sq ft, a one car garage and a patio big enough for 2 chairs and no bbq allowed (but it’s got granite and stainless!) for the low low price of $400K.
I lived in this neighborhood for 2 years until last May. It’s awful. the 7-11 across the street routinely has vagrants drinking and sleeping in the parking lot. There is a light rail track that constantly stops traffic. And, as it turns out, the condo building is across the street from a halfway house where the state of California releases mentally challenged inmates that cannot be reintroduced directly into the community. The police used my driveway twice to conduct searches of cars they pulled over because they knew that we were not violent criminals and felt safe about using our space. My neighbor was attacked in broad daylight and his truck was stolen. Someone pulled a gun on my other neighbor at 7:30 AM, but then ran away, and the police assured us it was a mistake and the gang bangers had the wrong house (Oh, you mean they could have accidentally come to my house?)
My point/ question is, that when someone announces that they’re going to be homeowners, and especially first time homeowners, everyone oohs and aahs and congratulates and smiles. I was the only one who did not. I asked a coworker if it’s proper for me to pull him aside and think long and hard and tell him my experiences in that neighborhood. Everyone, including my mother, told me that would be rude and that it’s absolutely not my place to do so.
Anyway, on the day they signed the papers, they discovered the halfway house for mental inmates, which was buried in flowery language somewhere in the CC&R’s, and their second night their garage was broken into and all of my coworker’s prized musical instruments and lots of personal effects like good winter jackets, etc. were stolen.
I have also had other friends buy pointless, horrible property in other places and one has chosen foreclosure and walked away to live with her parents, destroying her and her husband’s credit for years after the condo they bought for $450 was appraised in the low 200s. Another is having their marriage dissolve after the wife nagged the husband into buying a house in a highly overinflated area at the peak, where the house has lost 50% of its value.
When is it proper for someone to speak up and stop the madness? Had I had the balls to tell my coworker not to buy there, I might be an a-hole raining on his parade, but he wouldn’t have lost $10K in musical instruments and be living across from a minimum security psych ward. Was I wrong not to speak up, put a fake smile on and congratulate?
How would you deal with this situation?
Asking Price: $702,900
Income Requirement: $133,078 Downpayment Needed: $140,580
Beds: 2 Baths: 3 Sq. Ft.: 1,790 $/Sq. Ft.: $393 Lot Size: – Property Type: Condominium Style: Other Stories: 1 Floor: 8 View: City Lights, Mountain, Panoramic Year Built: 2007 Community: Airport Area County: Orange MLS#: S588594 Source: SoCalMLS Status: Active On Redfin: 3 day
Super mountain, city lights and horizon views! Corner unit featuring a grand foyer and gallery. The kitchen has granite countertops, Viking appliances and beautiful cabinets. Floor to ceiling windows and wrap around balcony. Wood flooring throughout most of the unit, carpeting in the bedrooms. Fireplace in the living room. The building has a lobby entrance, two pools, jacuzzi, conference room, gym and more. On-site management.
They didn’t waste much time foreclosing on this guy.
Foreclosure Record Recording Date: 04/17/2009 Document Type: Notice of Sale (aka Notice of Trustee’s Sale) Document #: 2009000189064
Foreclosure Record Recording Date: 12/26/2008 Document Type: Notice of Default Document #: 2008000590159
It looks like he gave up about a year ago. It must have been tough to accept that he lost almost $300,000 in 18 months.
Now that the high-flying real estate market of the Great Housing Bubble has crashed, let’s look back to an investment style of yesteryear to provide for retirement. Cashflow investing is the idea that stable inflows of money can be captured and diverted to you for a price. If you accumulate enough cashflow, you can retire.
Stable Sources of Cashflow
In retirement, what determines the amount of money available to enjoy for lifestyle expenses? Is it your wealth? Is it the equity in your home? Not really. It is the stability of the sources of cashflow you control.
Many are obsessed with being rich when what they really want is unlimited spending power. People who have attained great wealth may have amazing spending power, but they seldom use it. If they did, they would not be rich.
Being rich is about forming a habit of saving and consistently spending less than you earn. It is about having the self-discipline to limit your spending voluntarily rather than being forced to by a lender’s credit limit.
You and I work because we need a large amount of stable cashflow to cover personal spending and provide a balance to save. We need to work until we acquire enough assets to provide a stable source of cashflow from another source — our investments.
The quality of our lifestyle and the quantity of our available spending money in retirement is directly related to the sources and stability of cashflow you control and direct. The quantity of money or total net worth is not as important as the ability to convert it to cash.
Cashflow Investments
The problem with asset appreciation as the primary method of funding retirement is that this appreciation must be converted to cash in order to be used. This cash can be obtained through sale or through borrowing. Sale is the cleanest, and it is simple with stocks or other securities that you can sell part of, but houses are different. It is difficult to sell part of your interest in a house. Usually, you will need to borrow the money to stay in your house. This means either a reverse mortgage, or HELOC dependency.
Borrowing money is a bad way to go because you have compound interest working against you. The longer you live, the more you borrow, and the more interest on interest you pay. It is an airplane in a nosedive picking up speed heading to certain doom.
Cashflow investments like (1) dividend stocks, (2) bonds and other debt and (3) real estate are all worthy components of a balanced portfolio. Realistically, few people actually hold stocks or bonds for their cashflow. Most will trade these instruments if only by proxy through a mutual fund.
Real estate is the one cashflow investment that people are more familiar with because we all have homes, even if we rent them. It is also a great cashflow investment. Everyone should consider strategies for owning real estate as part of their retirement savings.
What I am proposing is different than what most people think when they invest speculate in California real estate. It doesn’t matter what it it resells for; appreciation is not important. Buy to obtain maximum future cashflow.
Real Estate as Cashflow
Real estate provides cashflow either through (1) renting the property or (2) living in it and saving the cost of a comparable rental. If you assume most people are putting about one-third of their income toward their housing expense, you see the expense is quite significant. If you own the property with no debt, you can enjoy the benefit of that money for yourself in other ways.
When you look at cashflow rental properties, you want to get the largest possible cashflow for the least amount of money. Don’t focus on appreciation potential unless you want to overpay and dilute the cashflow returns.
If you owned three properties with no debt where each one represented a market rent equal to one-third of your yearly income, you would have a stable income without having a job — other than perhaps property manager… if you want…
The retirement hurdle: own three properties of equal quality to what you rent or own today with no debt.
Living in Retirement
If you look at the fate that awaits us all as seniors, you can see distinct boundaries between the styles of life of various people based on how they lived and how they saved.
There is one group that will save nothing. They will have to chose between working until they die or living on about one-third of their lifetime wage average through Social Security. This is the minimum entitlement in our society as granted in the Social Security Act of 1935.
According to Wikipedia, “… the Social Security program began as a measure to implement “social insurance” during the Great Depression of the 1930s, when poverty rates among senior citizens exceeded 50%.” Social Security is the collective price of societal compassion to its senior citizens. I am glad it’s there.
How well you live above and beyond this minimum entitlement depends on your stable future cashflow from your investment savings.
The conventional wisdom among financial planners is that you need about two-thirds of your work salary as monthly spending to live comfortably in retirement. Social security gets you one of those two-thirds. If you can pay off your primary residence, you get the remainder. Paying off a home and living on Social Security in retirement is still an option in the United States.
Paying off Your Home
Paying off a Home mortgage became passe during the Housing Bubble. People had better things to do with their money than retiring debt. Debt was cheap and abundant; why pay it off under those circumstances? Paying off a house as an investment strategy nearly died. Did anyone keep their conventional mortgages during the bubble?
If you retire debt, you no longer have to service it. For those that keep a revolving credit line at its limit, this is a strange concept, but retiring debt is fundamental to having a stable retirement. Do you want to work and service debt forever? Who is the slave and who is the master?
Paying off your home mortgage removes an enormous financial drain from the family’s balance sheet and greatly improves an income statement; it is an historic measure of success.
Paying off Your Investment Property
If you pay off your home plus one other investment property — like perhaps your starter home — you have more than enough stable cashflow to live comfortably in retirement. (1) Social Security plus (2) a primary residence with no debt and (3) a paid off starter home as an investment equals (=) a prosperous retirement.
It is an old investment strategy to keep a small condo or first-rung property, and it is a good idea if the property is financed with a conventional mortgage. Unfortunately, most people simply used these properties as sources of additional leverage in building their speculative empires.
Remember the Emperor? He levered up and bought 15 properties with hugely negative cashflow and no equity. He will be wiped out. If he had purchased for cashflow, he may have obtained 5 properties up through about 2001, and spent the rest of the housing bubble paying down mortgages. He probably could have owned $3,000,000 in property free-and-clear; instead, he owns $12,000,000 worth of debt and $10,000,000 worth of property — on its way to being $7,000,000. He will be crushed.
When you purchase your first property, it should be near rental parity (at least it will be if you are an IHB reader). Ten years later, that property should have a positive cashflow due to 10 years of escalating rents.
If you keep the property, you can take the excess rent and put it toward the mortgage paying off the debt more quickly. Remember, the goal is to have maximum free cashflow in retirement, so you want to pay off those debts.
Debt equals delayed retirement.
Success
If you (1) save money, (2) acquire assets with maximum cashflow and (3) pay off debts, you will be successful and enjoy a very comfortable retirement. Real estate should not be the only component of your retirement savings plan, but it will be an important one. I hope this provides a way of looking at real estate that benefits you. Cashflow is King.
Your cash is king, Keep you in my bank. Your cash is king, never need to thank. Your diamond ring, round and round and round my head. Wiping all the debt from me. It’s making my soul sing. Having the very best of things. I’m crying out for more.
Beds: 2 Baths: 2 Sq. Ft.: 1,300 $/Sq. Ft.: $330 Lot Size: – Property Type: Condominium Style: Other Stories: 2 Floor: 1 Year Built: 2000 Community: West Irvine County: Orange MLS#: P702480 Source: SoCalMLS Status: Active On Redfin: 2 day
SOUGHT AFTER SHERIDAN PLACE, 2 BEDROOM 2 BATHROOM, FIREPLACE IN LIVING ROOM, SPACIOUS KITCHEN, INSIDE LAUNDRY. NOT A SHORT SALE OR REO. NEW PAINT AND READY TO MOVE IN. FABULOUS LOCATION CLOSE TO TRAILS, COMMUNITY PARKS AND POOLS. AWARD-WINNING SCHOOLS!!
Today’s featured property has an interesting history. It stands for everything opposed to the point of my post today. You have an owner who bought for appreciation, converted every penny to cash, and defaulted on his loans to IndyMac which you and I will pay for. Then you have the flipper who stepped in to make a quick buck at our expense.
The original owner paid $231,500 back on 6/28/2000.
After a series of refinances, he ends up with a $397,500 Option ARM first mortgage, and a $79,500 HELOC.
Total property debt is $ 477,000.
Total mortgage equity withdrawal of $245,500 plus his downpayment.
He had no problem converting appreciation to cash. Do you think lenders will be that stupid when you want to retire? Are you counting on it?
Since so much of today’s post was about real estate investment and success, I want to direct you to John T. Reed’s website. If you have never heard of him before, he is a real estate expert and author whose work I admire greatly. I recently purchased Succeeding, and I enjoy his no-nonsense writing style. Check out his Guru Ratings.
Pretty woman walkin down the street
Late summer thread, on the internet
In 
If there is a reason for lender collusion to withhold inventory, it is their collective fear of recreating Las Vegas in every market in America. They have not begun to face the staggering losses they will take in Orange County.
