What debt bubble??

[TJamesX]

........ this debt bubble.


Don't know if anyone has been reading about recent isssues with sub prime lending organisations in the US, or the housing market over there - but I had to share this...

This guy is blogging about his failed attempt to become a real estate mogul - and how he can survive without foreclosing on all his investment properties. Here's the blurb from his blog;

Casey Serin: I'm a 24 yr old "would-be real estate mogul" from Sacramento CA. After going to a few seminars I bought 8 houses in 8 months in 4 states with no money down looking to fix 'n flip. I made some mistakes and am now millions in debt, trying to avoid foreclosure, sell quickly, repay everyone, and share my lessons to help others in trouble. Comments welcome!

and the link to his site

http://iamfacingforeclosure.com/

I had come across this before - but only recently did i see his posting of assets and liabilities.... I simply could not believe that this guy was given that much credit - but he was......

here's the link to his finances spreadsheet

http://spreadsheets.google.com/pub?key=pPacQAmy3C4AuHrqHYLazIQ



he's down 300k in negative equity and a further 175k in credit card debt, with a monthly cash flow of -16k.

Not that this is the norm - but how anyone could actually arrive at this situation staggers me, and at least goes some way to explaining why the sub prime lending market is under real stress -> http://ml-implode.com/

Where will it all end - I have no idea, but I don't think this could be described as being normal economic times, especially with regard to extension of credit by the finance industry




But I give a fair bit of credit to Casey - he's trying to get out of what seems like a massive 500k hole, and hopefully preventing others from following in his footsteps..... But I don't understand why he wouldn't just declare bankrupcy

TJ

 

[TheAnalyst]

........ this debt bubble.

....
But I give a fair bit of credit to Casey -
TJ

Agree. This guy will stand up pretty quickly soon.

 

[BV]

Sad isn't it?
It shows that overleveraging can be a problem in a negative market.
If he had done this at the beginning of the boom he would have been laughing. Cheers

 

[jazzmoo]

I would also question the wisdom of a new investor acquiring so much property so quickly. Eight homes in eight months -- that's really for seasoned people. Regardless of what the market was doing, this person went in too quickly and didn't give himself time to learn.

 

[Bantam Roosta]

I would also question the wisdom of a new investor acquiring so much property so quickly. Eight homes in eight months -- that's really for seasoned people. Regardless of what the market was doing, this person went in too quickly and didn't give himself time to learn.

I think the point is that he went to these seminar's where they tell you that you CAN buy 8 properties in 8 months with no more knowledge than what they provide you with from their packages.

BR

 

[BV]

I would also question the wisdom of a new investor acquiring so much property so quickly. Eight homes in eight months -- that's really for seasoned people. Regardless of what the market was doing, this person went in too quickly and didn't give himself time to learn.

He was probably thinking of selling them when they went up in value
I guess that would have been a good plan in the beginning of the cycle
but his timing wasn't right.
He didn't see the end of the cycle and the price correction that was on the way....
Cheers

 

[jazzmoo]

I guess that would have been a good plan in the beginning of the cycle
but his timing wasn't right.

No one can get their timing that perfect. That's called blind luck. On reflection, it is probably the property seminar people who got their timing right.