"I'm not buying property again—ever again." (Crain's)

Just noticed that it's a few days old, so apologies if it's already been presented here.

alanhart, you may want to include a piece of the article to go with the title of your thread

Noel, a 28-year-old math teacher from Harlem who asked that his last name not be used, always thought it would be smart to invest in real estate. So when his cousin introduced him to a mortgage broker who promised he wouldn't have to put a penny down on a $1 million piece of property in New Rochelle, he jumped at the chance. Then, the same broker told him about a home in Yonkers. Again, he didn't have to put any money down.

In over his head

Before he realized what he was getting into, Noel says, he was scammed into signing two mortgages totaling more than $1.5 million. The mortgage broker even provided a lawyer for the closing.

"I make $50,000 as a schoolteacher," he says. "There's no way I should have been approved for loans that big."

Hemmed in by monthly payments totaling more than $10,000 and bills for maintaining a third property on Long Island, Noel had no choice but to file for bankruptcy, he says. He filed without the help of a lawyer—he couldn't afford one—and he plans to walk away from the three homes and get a fresh start, this time without dreams of making it big.

"I thought real estate was a good business," he says. "But I guess it's not for me. I'm not buying property again—ever again."

forget prime manhattan, what does this have to do with anything except one stupid guy.

classic...and this jerk has the nerve to blame a mortgage broker. He knew exactly what he was doing when he committed mortgage fraud to obtain these mortgages. Instead he blames a mortgage broker and the bank who lent him the money...he should be in prison...he isn't stupid...he is a criminal.

We should expect to hear more stories like this

that alleged "journalist" should be ashamed of themselves for writing such a ridiculous story...and the newspaper industry wonders why no one reads papers anymore

What makes the story even better is that, he is a MATH TEACHER. HAHAHAHAHAHAHA........ You can't make this stuff up. I'm still laughing.

But it's the NEW math...

Joel Klein and Mayor Bloomberg should find out which school Noel is teaching at and fire his good for nothing dead-beat ass.

"What makes the story even better is that, he is a MATH TEACHER."

LMAO

malraux- It must be the same math taught to Realtor's, when convincing a buyer, they can afford propert, they clearly can't. I can hear it now. Realtor X "No SIR you can afford this place, in fact I have a friend that is a mortgage broker, and he could get you a fantastic deal with Zero down". Echoed millions of times across this great land.

Good idea, JuiceMan. Here's a piece of the article that doesn't include the "human interest" story:

While the number of bankruptcies [in NYC] is not as high as it was during the previous economic downturn in 2001, the filings this time around are increasing at a greater rate, rising 31% from January through July versus the year-earlier period.

"I've never seen it this bad," says Gregory Messer, a Brooklyn bankruptcy attorney. "There were times where there were more bankruptcies, but I don't know if I've ever seen so many people prepared to walk away from their houses."

Listen and enjoy....

www.curvebank.calstatela.edu/newmath/newmath.htm

Oops! Try this...

http://curvebank.calstatela.edu/newmath/newmath.htm

Or this Math treatise:

http://www.youtube.com/watch?v=rLprXHbn19I

I love Tom Lehrer, but that youtube item is totally excellent!

The Abbot and Costello bit is hilarious - I'd never seen that one.

I wonder if they do a bit on 28%/40x.

"I make $50,000 as a schoolteacher," he says. "There's no way I should have been approved for loans that big."

BRILLIANT JUST BRILLIANT!!!! MORON!!!!

And you know what - If I made my living teaching Math and wanted to be thought of and respected in by profession and I did soemthing as stupid as this, there's no way you'd get me to interview....

It's as if they found a Doctor who takes 17 asperin for a stomach ache.. "ummm, the guy at the Pharmacy told me it would stop the pain"......

BTW... We should all pony up and bail this guy out, it really wasn' this fault....

Oh GOD please help us.

They interviewed this Southern California guy the other day, put all of the 130k in savings he had as a downpayment on 8 properties worth over 4 million dollars. Needless to say, he filed for bankruptcy about 6 months later (personally, I am surprised it took THAT long).

Not only was he blaming the mortgage brokers for having approved him for the mortgages, but he was also threatening to sue them. Priceless...

I think the main thing to take away from this is a reminder: MOST people are that stupid or worse. MOST people drive the market. And that's what we're facing. These little anecdotes should not be seen as "man bites dog" items.

Do people think that this stuff didn't occur within this city? It has occurred everywhere, and we will see just how much, in the next few months, as prices continue to drop. Of course, some NYC areas will see there fair share of more instance's, but make not mistake, every area will see their fair share of buffoonery.

http://ny.therealdeal.com/articles/shvo-boymelgreen-named-in-suit-against-20-pine-street

Developer Shaya Boymelgreen and marketer Michael Shvo are facing a lawsuit from a Brooklyn-based buyer that alleges they exaggerated sales figures and completion dates at 20 Pine, The Collection, and then refused to rescind a contract to buy 10 apartments.

The suit, filed last month by 20 Pine Realty in New York State Supreme Court, alleges that 20 Pine Realty entered an agreement to buy 10 condo units at 20 Pine Street in January 2006 and deposited $819,500 to hold the apartments.

20 Pine Realty lists its location at 519 Flushing Avenue in Brooklyn. The New York Secretary of State's records do not list any principals at the firm, which organized as a limited liability corporation in January 2006.

The plaintiff's lawyer, Yoram Nachimovsky, could not be reached for comment.

BGaria, I wonder if that guy was posting all over the internet about how renters were being "priced out forever" and "paying his mortgage" and how he had various chauffeur driven cars and a hot wife, etc...

So the guy makes $50,000 and borrows $1.5 million for (im assuming) 30 years.

1.5M / 30yrs = 50,000 per year excluding interest. Math teacher........ :'(

"BGaria, I wonder if that guy was posting all over the internet about how renters were being "priced out forever" and "paying his mortgage" and how he had various chauffeur driven cars and a hot wife, etc..."

Probably so, if he was dumb enough to put himself in that situation to begin with. People like should have to swear off buying property ever again. They shouldn't be allowed to buy property ever again.

The guy's a math teacher. Formal logic is a branch of math. If you start with the proposition that all property increases in value over time (especially anything in or around NYC) then a logical way to make money to buy as much property as you can and sell it after the price increases. The problem with propositional logic is that your conclusions are only as good as your first principles, in this case, "real estate always goes up".

I jest, but only a little. How many people do you know who bought a house over the past 6-7 years without an explicit or implicit assumption that the property will definitely increase in value by a specific period of time?

My personal favorite -

http://www.streeteasy.com/nyc/sale/245726-condo-40-bond-street-noho-manhattan

Bought exactly one year ago, for.....(wait for it)....

$3,100,000!

A one bedroom, 1,200 square foot apartment, with not-great views or light, for $3,100,000. A treatise unto itself in how not to invest in high end real estate. You caould have bought (at about the same time) a small (1,400 sf) two bedroom for about the same price at 15 CPW.

malraux, what's stunning to me is the huge difference from floor to floor for the same layout. The one you listed is 5D. 4D sold for $2.8m, and 6D looks to be asking $3.5m. Correct me if I'm wrong, but since when is one floor up worth ~350k when you're not that high to begin with, and your view is pretty much just Bond St?

Look, I happen to think the architects did a killer job on 40 Bond (and in general, I'm not a real 'glass box' kind of guy) - I'm a huge fan of their work. I think the building is an important design development for NYC. I applaud all involved and hope that there will be more like it. It is a superior design product.

But regardless, the prices for these 1 bedroom units were, to say the least, egregious. $3MM (on average) for a 1 bed?!?

Typical greedy idiot who thinks he can get something for nothing, then whines and cries foul when his sorry little house of cards collapses around him. And it's the good old taxpayer who'll be tasked with bailing out these over-extended losers.

Why no scorn for the financial institutions that allowed this to happen? There's enough blame to go around. Why were there no controls in place at financial institutions to prevent something like this from happening? A simple credit report should have shown this guy was overextended just from buying the first house. Blame the guy all you want, this MBA and former derivatives portfolio manager is blaming the financial institutions for not having sufficient controls in place. And I'm glad you guys find this situation so funny. This mess has not only screwed the lives of average Americans, but ruined the USA's reputation abroad. It's time for Americans to return to conservative credit practices (i.e. 20% down, 30 year fixed-rate mortgages) and to stop trying to get something for nothing. Laugh all you want at your neighbor's expense--the crap has hit the fan and it will negatively affect your neighbor AND you for quite awhile.