tick...tick...tick...tick...

[formercia]

http://money.cnn.com/2007/05/22/magazines/moneymag/retirement_interrupted.moneymag/index.law.htm

Retirement interrupted
One couple mapped out their retirement, but the plan hinged on being able to flip Florida real estate. Oops. Time for Plan B.

--snip--

To supplement their retirement savings of $260,000, they figured they'd buy fixer-upper homes to renovate, then sell at a profit in the state's hot housing market. "We thought we'd make $100,000 without batting an eye," says Carol.

But when the housing bubble burst, so did their dreams of a real-estate funded retirement. The properties have been on the market for nine months without a serious offer, and the carrying costs are killer: The Daimlers pay more than $65,000 a year on their mortgages (including loans for their primary residence and a vacation house in North Carolina), plus tens of thousands more for property taxes, insurance and maintenance.

The couple are pulling out $15,000 a month from savings to cover their expenses, and they've already run through more than half of their nest egg. The irony: On paper they seem to be in great shape, with a net worth of $1.6 million. But since most of that money is tied up in real estate - assets they can't easily sell - it doesn't ease their current cash crunch.

Money is so tight that Carol has stopped filling prescriptions for her cholesterol medicine. Steve says he has no choice but to go back to work. "The financial pressure is too great," he says.

--snip--

How many more like this are out there......


Once the banks bleed you dry, that's it baby........


Welcome to Medicare.....

[MNDemNY]

1. Not to be cold...

but this seems like high risk a investment strategy. Not smart for retirees.

[formercia]

2. I wonder how those make a Million in Real-Estate videos are selling?

There's a lot of people who bought into that shit.

And get cash back at closing!!!!!!

[MNDemNY]

6. If it sounds too good to be true.. ... ... ....

:nopity:

[EnviroBat]

14. Right! "I bought me first property at 17 without a penny to me name..."

What a load of crap.

[MNDemNY]

17. Funny thing, but

I bought my first property in 1984, a townhouse in MN. I put up $1.00 to consummate a purchase agreement, assumed an FHA mortgage, and at closing, received $180.00 back from "excess escrow" Really.
Then reallized a $11,000 profit 2 years later. The good old days.

[1monster]

18. Well, my sister did that... but she was nineteen, the house which is

at least twice the size of mine was divided into two apartment which paid her mortgage off in five years.

She now owns six houses and rents five of them out. Her son lives in one of them and sort of sometimes pays a nominal rent.

Real estate is very inexpensive where she lives though.

ON EDIT: She bought her first house about thirty years ago.

[whistle]

3. Once again people have been lured into gambling their life savings

...away in "get-rich-quick schemes" which have been promoted across the country in seminars and infomercials always showing the advantages of leveraged financing, but never showing the downside risks or belittling such risks as long-shots. These schemes have been promoted and sold by hedge fund promoters offering low interest only loans and when the portfolios get fat and blotted, they call in the margins. In casino gambling the decks are always stacked in favor of the house and hedge fund managers are the only winners. They even use plants who constantly show up at these seminars talking about the killings they've made.

IT"S ALL PHONY! IT'S ALL A SCAM!

Americans are gullible and still buy into the dream of getting rich without working.

[formercia]

5. Suckers as a Cash Crop

There was just too much equity built up in the market. A plum ripe for the picking.

[sicksicksick_N_tired]

12. Well, what else is there to do in pursuit of that faux "American Dream"?

I just wish Americans would finally confront the truth about all lies pushed by the corporatocracy in order to make profit off people's brainwashed notions, pushed by the corporatocracy.

[Bucky]

4. They've got THREE outstanding mortgages? This was their retirement plan?

I got a plan for ya, folks. Pick one of your three homes to live in sell the other two--even at a slight loss--and stop bleeding $5400 a month in mortgage costs. Assuming the three houses are of equal value, that would cut their monthly housing expenses down to $1800 a month. Once you get the cash for the other two house sales, you can put that cash in safer, low yield investments, your retirement income and investment income will bring that remaining mortgage down to a manageable figure.

I feel sorry for the people who got screwed on their Enron holdings too. But they were still idiots for not diversifying their investments. Jeeeze, this ain't rocket science.

[MNDemNY]

8. Some employees of enron COULD NOT

"diversify their investments" They were at the mercy of their "retirement plan" (nice arrangement for Enron, don't ya think?)

[Bucky]

27. Yes, they could diversify..

Enron didn't control their entire portfolios. When the final ax fell, yes they prevented sell offs. But in the years before then, they weren't preventing people from cashing out their shares. They offered stock options, but the individual employees controled their own accounts. Plus Enron certainly was paying people enough that they could have bought other investments.

I'm not saying they weren't duped. I'm just saying that if they were, they were dupes. Diversifying a portfolio is Econ 101. I'm in Houston and I know plenty of ex Enron employees, some of whom saw the writing on the wall and some of whom ignored the yellow flags.

[EnviroBat]

15. Couldn't have said it better. Greed got the best of these two...

[Joe Fields]

7. well, cry me a fucking river...

[canetoad]

9. Sorry, but I feel more sympathy for the people

who could have afforded to rent those fixer-upper homes before renovation.

[dkofos]

10. They could try to rent the properties until the market swings back.

I had to do it in the early 90's.

[IDemo]

22. swings back?

At about the same time we see $1.25 gas?

[formercia]

25. and people willing to work for 50 cents an hour..

I think that's called a Depression....

[EnviroBat]

11. Hmmm, why do I not seem to care....

$260,000 in retirement savings? WTF, tell that to my old man, a Navy Vet, who is still working at 71! Maybe this is Karma coming back to bite these old folks in the ass.

[wildhorses]

13. they are able to pull 15 thou a month out of svaings and yet

she can't afford her cholesterol medicine...they have some serious priority issues:eyes:

sorry, hard to find pity....


looking....























still looking....

























no can find, sorry :shrug:

[Joe Fields]

23. why do you hate poor little rich people?

:rofl: :rofl: :rofl: :rofl: :rofl: :rofl: :rofl:

[wildhorses]

24. i don't hate them -- i just don't pity them ...

they have no pity for me

so, i just return the favor.

no problem.

:hi:

[1monster]

16. The developers have runied it for everyone. Within five blocks of my house,

there must be ten to fifteen houses for sale... Many of them have been up for sale for six or more months. On the linear three block road where I live, there are four houses for sale. The next two block-road, there is one house for sale with a house for sale on another street diagonal from that.

That's six houses for sale in an area that I can walk in about seven minutes and drive in about a minute and a half...

Meanwhile, developers are putting in tens of thousands of new houses and condos in our county.

Prices are falling faster than the Twin Towers did.

[formercia]

21. The boys had to do something with the money they stole. n/t

[spanone]

19. Investing 101 = Real Estate = LONG TERM INVESTMENT

a fool and his money

[formercia]

20. I bought 32 acres nearly 20 years ago.

It sits on top of the same aquifer that Poland Spring uses for their water supply and it has several artesian springs on the property. it's all paid for and I start collecting Social Security next year. That about says it.

[Javaman]

26. These people are dumb, check this out...

"retirement savings of $260,000"

Eventually he became a sales director, earning about $150,000 a year. Carol focused on raising the kids when they were young, later getting her real estate license. By 1991, though, she was working for the state of Virginia as a disability case consultant, raising their income to $200,000 a year.

"paid cash for their retirement dream home: a $640,000,"

"To finance the purchases, they took out a $400,000 mortgage on their home"

WTF???

didn't these tools read the papers? It was well known by mid 2006 that the florida market was tanking.

before their stupid ass move they had close to 1 mill liquid in the bank and they start gambling with it at this stage in their lives and on top of that they didn't pay attention to what is going on all over the nation regarding the housing bubble. (shakes head in wonder)

They buy a big as house way much more than they actually need then dig themselves a bigger fucking hole by buying up more property????

It seems to me that these morons tried to make one last "big" score.

So these fucking idiots piss away 640K of their savings to leave only 260K for retirement which was supposed to be only a short time away? Then take out a 400k mortgage to try and unfuck the unfuckable?????

Addictions come in many shapes and sizes, these now humbled ego maniacs must have been quite a pair when they were wheeling and dealing alright. Take no prisoners.

Instant karma man, instant karma.

[formercia]

28. P.T. Barnum was right

there is a sucker born every minute.