An example of what?

confuzed

To cut story short, yesterday i met some one owning three houses. ooops not owning mortgaging.:D

A frend of mine is looking for a house in Swords area. Yesterday, we went for a house. OK story is about owners and not the house.

They are non national couple and settled in Dublin for last 4-5 years. Both having permanent jobs and earn around 7000K/ month after tax. They are paying three mortgages out of this salary+ rental income. All houses are three bed
(300,000-350,000) and bought in year 2005. They live in one and rest two are rented. All are mortgaged for 30 years.

The guy was very proud of three houses he owns and he was pretty much interested in telling his story to strangers (like us) even in first meeting.

What do you say. Is it an example of EXTREME- OPTIMISM OR STUPIDITY OR GREED?

Paulw

Sounds like good business sense, since they can afford it. Fair play to them.

El Stuntman

confuzed wrote: »

To cut story short, yesterday i met some one owning three houses. ooops not owning mortgaging.:D

A frend of mine is looking for a house in Swords area. Yesterday, we went for a house. OK story is about owners and not the house.

They are non national couple and settled in Dublin for last 4-5 years. Both having permanent jobs and earn around 7000K/ month after tax. They are paying three mortgages out of this salary+ rental income. All houses are three bed
(300,000-350,000) and bought in year 2005. They live in one and rest two are rented. All are mortgaged for 30 years.

The guy was very proud of three houses he owns and he was pretty much interested in telling his story to strangers (like us) even in first meeting.

What do you say. Is it an example of EXTREME- OPTIMISM OR STUPIDITY OR GREED?

did you ask him what rental yield he was achieving on these properties?

are the mortgages interest-only?

will he be able to rent for the same amount in future years as supply increases hugely in the Fingal area?

how much (if any) equity does he now have in these properties?

I admire people who make things happen for themselves but I'm dubious in this case, sounds like a recipe for financial disaster to me. It's hardly prudent diversification across investment classes

Garda_boss

How many houses does he own if he stops paying his mortgage? Thats when you can say you own x amount of houses until then the bank does.

punchestown

confuzed wrote: »

To cut story short, yesterday i met some one owning three houses. ooops not owning mortgaging.:D

A frend of mine is looking for a house in Swords area. Yesterday, we went for a house. OK story is about owners and not the house.

They are non national couple and settled in Dublin for last 4-5 years. Both having permanent jobs and earn around 7000K/ month after tax. They are paying three mortgages out of this salary+ rental income. All houses are three bed
(300,000-350,000) and bought in year 2005. They live in one and rest two are rented. All are mortgaged for 30 years.

The guy was very proud of three houses he owns and he was pretty much interested in telling his story to strangers (like us) even in first meeting.

What do you say. Is it an example of EXTREME- OPTIMISM OR STUPIDITY OR GREED?

Are they both Guards?

gurramok

On back of envelope calculations, there is no way they'd afford 3 houses bought in 2005 on their own in the 300-350k bracket on salary 130k combined.(we're talking 8x combined on 1m total mortgages)

At least 2 mortgages must be interest only and they are subsidising the rent, unless they had windfalls or saved huge amounts for years before coming here 5 yrs ago, what are the bets?

In saying that, it is possible, just the timeline for buying in 2005 is suspicious as prices were sky high then.

It looks like another case of wreckless lending by the banks.

krd

There is nothing unusual about what this couple have done.

It's called mortgage fraud. It's what's kept the prices up for the last couple of years.

A thirty year mortgage on a 350K house in swords, at the going rental rate in Swords, will barely break even on current repayments. (no body is getting more then 1400 p/m for a 3 bed in Swords --- some people may have found some fools, but it's not the norm)

There was a time, not so long ago. Where to get a mortgage, you had to be married, go to mass every Sunday and wear nylon blend grey trousers, before they'd let you even fill an application form. Recently the banks have been falling over themselves to lend to anyone. A loan officer makes their money by people taking out mortgages, not by whether it's a good idea or not for the bank or client in the long run.

Loan officers encourage mortgage fraud.

I know several people doing this.

Purchase an initial house they can't afford (borrowing a deposit and not declaring the loan on the mortgage application - the mortgaging bank delibrately do not check to see if the customer is hiding extra borrowings). Get a home improvement loan to pay their mortgage. Then after a short period, borrow 100% against an investment property, the banks are more then happy to do this. Then repeat and repeat.

There are Irish people and "Non-Nationals" doing this. They think they're business geniuses. They think they can borrow indefinitely.

People will lose their shirts. May even you will,,

mikemac

confuzed wrote: »

The guy was very proud of three houses he owns and he was pretty much interested in telling his story to strangers (like us) even in first meeting.

What do you say. Is it an example of EXTREME- OPTIMISM OR STUPIDITY OR GREED?

I don't see what there is to be proud of. Now if he said he setup a business in 2005 from scratch and it was now worth over €1million then anyone would be realy impressed

But all they did was buy a house, then borrow against it and get two more houses. And pay sky high 2005 prices as well.
Even if they did this before the housing boom and the mortgages were paid off, then of course I’ll say well done for securing their future but is it realy cunning and savvy? What amazing business skill do they do?

Anyone can buy a house but very few can be an entrepreneur in business!