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Strategies & Market Trends : The Residential Real Estate Crash Index
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To: Tradelite who wrote (1521)2/3/2002 8:56:40 PM
From: GraceZRead Replies (1) of 306849
 
Show me a piece of real estate, anywhere that would be sold at zero dollars today. (not saying you can't find one SOMEWHERE, but it will be hard to find.)

Our former mayor Kurt Schmoke went on network TV about seven years ago and told the announcer that there was nothing wrong with the Baltimore City real estate market that destroying 40,000 houses wouldn't correct. These were tax delinquent houses that had been abandoned by their owners that the city owned by default. These are houses that are worth less than zero because the city destroyed a great many of them AND went after the old owners to get the back taxes plus the 22% interest they charge on delinquent taxes. 40,000 houses guy, 40,000 of them and this is just one city on the east coast.

In Texas after the oil boom went bust so many people burnt down their houses the insurance companies went on TV with public announcements warning people that if they committed arson it was unlikely that they would get away with it, they would be caught. Meanwhile a local quarry filled up with cars with their keys in the ignition. This is what leverage can do for you when it goes bad, when boom turns to bust.

There is no risk free investment, NONE. Leverage increases your return but it also increases your loss when the investment works against you. I know too many people who had to pay in money at settlement when they had to sell a house below the value of the mortgage plus selling fees.
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