Roody

I guess it's a tough choice for some people. My (rented) apartment was just foreclosed on. My former landlord still owns:

• 2006 Cadillac
• 2000 SUV
• 2007 VW Beetle
• 2008 Harley-Davidson motorcycle
• 32 foot sailboat that he uses once or twice a year

What's this all about?

spacerconrad

If the loan was on the building, those items were, I'm guessing, not on the mortgage.

I do smirk a bit, though, at the fact that he was able to buy all that stuff... and can't pay his mortgage.

Roody

My question is, why would a person keep all of those vehicles and lose the house? What kind of vallues does this conduct reflect?

spacerconrad

I was pretty much agreeing with you. As to his personal reasons... I can't even guess.

Dahon.Steve

Auto collection feeds on itself. You'll see people doing the same with electronics, computers, clothing, shoes, bicycles etc. He was searching for a meaning in his life.

The problem with auto collection is that it's probably the most expensive hobby on the planet and if you're not making great money, you'll go bankrupt. The owner should have caught himself and his addiction before continuing. His real problem was never resolved and the constant "Shopping" for new cars only made is situation worse.

gwd

Other people's choices seem crazy to me but its a free country, if the guy wants to keep his toys and loose the home its his choice. A few years ago a guy in a nice car started parking on my block. He was living out of his car. He packed everything in his trunk so when he drove around or applied for a job he appeared more "normal" than if he still had a home but had to bike to the job interviews right? Will you be evicted because landlord would rather have his cars than keep the rental property or is he just getting his personal home foreclosed on?

Roody

Yeah, I'll be evicted, and a few other tenants of his already have been.

But isn't he losing the opportunity to buy more "toys"? It seems like the foreclosures would screw up his credit so badly that he won't be able to finance car purchases for quite a while.

spacerconrad

It may, unless he has friends in the Small Business Administration. My wife used to work for them, and corruption (as with any government organization) ran rampant.
The thing I would normally advise is to figure out how to buy your own home. It may seem like an anchor, but as long as you live in someone else's house, you're subject to their whims, to an extent anyway.
Unfortunately, Asset forfeiture and eminent domain is making even homeowners less and less secure in their property.

So... there's a risk regardless of what you do. Maybe the guys living in their vans aren't so nutty after all.

Roody

I don't want to start the whole rent vs. own debate, but right now I'm kinda glad that I do rent. Even though I have to move out of a home that I love, I won't have any problems with my credit rating (unless I'm legally evicted). I haven't lost any quity in the housing decline either. If anything, it seems like rents are going down, so there's a good chance that I'll pay less for next home. And although this foreclosur thing has been stressful for me, I'm sure it's more wtressful for my former landlord.

spacerconrad

Hell... if I were him, in his position, I'd sell all but one car, buy an airplane (s'what I do), and live on the boat. That'd be pretty sweet, though I have no idea how many other rental properties he may own, and whether his own home was involved in the foreclosure.

Roody

He lives in a big house in the suburbs--bought just over a year ago, I think before the real estate bubble burst.

spacerconrad

Oy. It's probably kicking his ass, too. I gotta feel sorry for him, as he's probably WAY over his head now.

gwd

If he's upside down on the rental property but not on the toys, walking from the rentals might make sense. If he doesn't need credit for a few years he has time to get his score back up. Plus, if his rental business is a corporation, it won't effect his personal credit just like you owning Enron stock didn't effect your credit. He could sell the toys one by one as he needs cash but he'd lose money trying to sell the property. I don't know if this is true but this story makes his decision seem rational.

A lawyer once told me that while bankruptcy for an individual is a major hassle, for a corporation its just another financial tool to be used as the need arises. Your landlord maybe got a good salary from his little corporation - he bought his toys etc. Now that the corporation is in trouble it can dump assets as needed without reflecting badly on the stockholders credit score. Maybe the cars are really owned by the business too?

This storyline seems consistent with the optimal way our free market economy is supposed to allocate resources. Landlords get in trouble and evict people so the more people looking for housing jacks rents up so other landlords can still profit and eventually rents get back to their optimal value. Rents were probably artificially low due to all the people speculating in rental properties. Your rent may have been subsidized by the landlord's expectation of rising value of the property. Renters may just have to suck it up and pay higher rents in order to get the landlords back to living the easy life.

TRaffic Jammer

hmm he might be sans cars and boat soon too if he wrote those loans against his real estate..

Allen

Why are you being evicted?
I would think the new owner (bank or otherwise) would want renters in their apartment.

rotharpunc

most likely if he is an intellegent business person the building and the cars are totally unrelated. If he is really smart they are all owned by seperate S-Corps. Sometimes it is just cheaper to walk away from something as a BUSINESS, this really shouldn't play a part in a person's personal assets if they used proper business planning.

joeprim

With the depressed market you really might want to think about buying a house. Intrest rates are at an all time low too.

Joe

schu777

Hmmm - I know of another one that is just as expensive - plus when they go into the ground - you can lose ALL of it.

Remote control jets

If you scroll down, you can the price of a kit - click on "Turbine Power", you'll see the price for the power plant...that does NOT include radio and some other gear you need. My friend lost one of his planes - total loss - $8000 GONE!! Of course when you drive a car off the lot, it's pretty much the same thing but you have something still.

spacerconrad

Amen, schu.

https://www.youtube.com/watch?v=aRmg88t35Y0

8 turbines, probably around $5k each, not to mention the rest of the airplane, 24' wingspan...

schu777

Yep - seen that video before too - shame, pretty jet. I think the cause was wind was bit much at the time - and not enough movement on the controls.

Another thought on that - I wouldn't be surprised it was carrying close to 3 gallons of fuel. Those engines when at full power can consume 20 ounces of fuel a minute...or somewhat around there.

Never did get into the turbines - too much money, but did get into the ducted fans - still have two of them, but no time nor money to go fly them in the last couple of years.

mattm

ha ha

I-Like-To-Bike

And he is probably still enjoying the use of his house and toys and is minus one piece of real estate which he may or may not have wanted that much.

You are looking for a place to live. Are you dissing the landlord for his ability to maintain his lifestyle?

TuckertonRR

if the apartment he owns is being forclosed - thus losing what I'd imagine to be a nice, steady, passive income source, then no, he obviously *can't* maintain his current lifestyle. If the apt. is in his personal name, then all his other loans, & future loans, will suffer. At the very least he's prob. got a thousand or more in legal bills just because of this (either personally or thru the corp).

Edit: I'd be interested in the boat. hehe
And Roody - you shouldn't automatically be evicted. If you've got a lease, you'll prob. have to move by the end of it. Otherwise, you do have a right to stay there, just because the owner changes doesn't mean you have to move out.

ericy

He is probably underwater on the mortgage, and figured it was easier to just let the bank have the thing rather than wait for the price to recover. I am not saying that it is ethical for people to just walk away when they are in a situation like this, but I hear of it happening all over the place.

StanSeven

[QUOTE=spacerconrad;8151587]It may, unless he has friends in the Small Business Administration. My wife used to work for them, and corruption (as with any government organization) ran rampant.
The thing I would normally advise is to figure out how to buy your own home. It may seem like an anchor, but as long as you live in someone else's house, you're subject to their whims, to an extent anyway.
Unfortunately, Asset forfeiture and eminent domain is making even homeowners less and less secure in their property.

So... there's a risk regardless of what you do. Maybe the guys living in their vans aren't so nutty after all.[/QUOTE]

First, that's an absurb statement. Second, if your wife thought something improper was going on, why didn't she report it to the IG?