Reply #35: Yes...

[bliss_eternal]

and you're right, it does suck all around.

I read a special issue of Money magazine, on Real estate investing. It was primarily a big, slick ad for people going deeper in debt. The magazine refused to endorse the logic in the inevitable--what goes up, must come down.

They profiled a specific area in CA--San Diego to be exact and I was absolutely stunned by the article. Most notably, a 24 year old young woman with a colleg loan debt and no savings. She bought a $580,000 4 bedroom, two bath home. It's near the airport runway, so planes taking off rattles the windows.

Get this, she took out a mortgage for 100% of the price of the home. Closing costs were paid by a $10,000 gift from her parents. At the time of the article, she was paying the majority of the mortgage by renting out three of the four bedrooms. Because a house across the street from her sold for $740,000 she figured her place was already worth $200,000 more than she paid for it. :eyes:

Her plan at the time of the interview was to borrow more asap, to invest in a condo.:wow:

The article goes on to detail people that intially lucked into making a huge profit on their first homes, only to trade up, sell and make more. Then many had a hard time buying into homes bigger than they could afford. The gradual progression from being lucky to being greedy struck me. The article ended with a couple with an empty open house, for a home they were listing for 1.3 million. The week prior, there were 40 people at the open house. They eventually got an offer of 1.2. Others in the neighborhood were concerned that they shouldn't take less than 1.25 million as it would affect them all--as most living on that block, did so as propectors and for the investment. :shrug: