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Strategies & Market Trends : The Residential Real Estate Crash Index -- Ignore unavailable to you. Want to Upgrade?

To: mishedlo who wrote (48921)	2/22/2006 1:39:58 PM
From: Think4Yourself	Read Replies (2) \| Respond to of 306849

Warren Buffet called it when he said almost a year ago that "The US could turn into a nation of sharecroppers".

To: mishedlo who wrote (48921)	2/22/2006 3:37:59 PM
From: GraceZ	Read Replies (1) \| Respond to of 306849

In Baltimore City there was/is an old practice called "Buy Like Rent". If you had some dead beat rental property that you couldn't rent and was negative cashflow, you'd advertize it for sale with the words "Buy like Rent" in big letters. You told people that it didn't matter if they had credit problems or no credit or low incomes. They didn't need a down payment and no closing costs because you'd finance them. The problem was that the loan was a five year balloon, so if your prospects remained poor by the time the balloon was up, the seller would just foreclose on you and take back the house. In fact, this was what he was counting on because he never intended to actually sell it to you in the first place just get you to pay a higher rent and be responsible for all repairs over the time period. They wanted credit risks. A good friend of mine, his father, who was a city garbageman his whole life, fell for this ploy when his family was young. It was difficult back then (1960s) for a black man to get any kind of mortgage, especially in a poor black neighborhood, let alone a guy who was a garbageman. When the five years was up, his father had a tough time getting refinanced, every bank turned him down and they thought that they'd lose the house. He finally found a advocate at the city employee credit union who put through a new mortgage but they were within hours of being thrown out. My friend still lives in the house with his mother, it's been mortgage free for about 15 years. His family was maybe 2% of the buyers who actually were able to make "Buy to Rent" work for them.