I'm not sure if this is the best place to post this, but I have a tale of woe to share. Enjoy... Become a Complete Fool
I own a small moving company, and we just finished a move for a young couple who moved into a very, very nice house. I of course did not ask how much they paid, but the husband told me it had originally been offered at $1 Million.
Now here's the tale of woe.
Apparently, this house was formerly owned by an assistant football coach at our local state college. He had the place paid off. No mortgage. The good life was his.
Then, his son decided it was time to step up and live his own dream. As a rap star. Somehow, he convinced dear old dad to take out a mortgage on the house to finance recording sessions, promotions etc etc etc.
The album hit the market like a blue whale being dropped from a helicopter. The cold wet thud was deafening. The live gigs were a disaster. No one came from miles around to see this fellow.
(Hint to aspiring musicians - if you have to pay people to record and promote you, you probably aren't very good.)
So - to make an agonizing story a little shorter, Dad lost his house.
Now, enter a bunch of young studs who are making their fortunes in real estate. They, being a bunch of aggressive, cocky morons, pick the house up in the foreclosure process with an eye toward flipping it. They upgrade the kitchen, paint the place, and all the other stuff you do. They made one small mistake though. They didn't check for liens on the property.
So - by the time their story was finished, they lost $150K on the place, and their partnership (and doubtless some friendships) has dissolved.
Now - the upside to this tale is that my clients got a nice deal on the home. Desperate sellers are great for that.
So - how could this have been avoided? I think the answers are pretty obvious.
1) Know the difference between investment and speculation.
2) Never borrow money to speculate.
3) You can love your kids, but sometimes that means saying 'no' to them
4) There is no such thing as an easy investment. Do your homework, and be careful.
5) If you want to buy a home, bargains do exist. Be patient, and let someone else be stupid. Just make sure it's not you....
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I'm not sure if this is the best place to post this, but I have a tale of woe to share. Enjoy...