A Bad Investment in Mount Arlington

Knife catching can be dangerous. Buying property as the prices are falling can do some lasting damage. Except during a few years during the bubble buying and selling a property within a year was a losing proposition. Buying and selling in the same year as the market is still falling can be even worse. Basically one is just throwing away money.

There is a mindset with many people that they have to own a property - even it is not in their best interest. Some think housing would be a great investment. Others see it is part of the American Dream. But when tens of thousands are lost within one year it is both a bad investment and a nightmare. That is the case with today's example. Lets take a look -

Here is the property -

The Front of the Townhouse

The Living Room

The Upgrade Kitchen

Here is the property info -

RELOCATED SELLER. UNIQUE OPEN MODERN DESIGN. GORGEOUS HARDWOOD FLOORS, TOTALLY UPGRADED CENTER ISLAND KITCHEN WITH GRANITE AND STAINLESS STEEL APPLIANCES. STUNNING DOUBLE-SIDED FIREPLACE. CUSTOM BLINDS AND WINDOW TREATMENTS. CENTRAL VACUUM, 9-FOOT CEILINGS. VOLUME CEILINGS IN MASTER BEDROOM AND BATHROOM. TWO LARGE DECKS OVERLOOKING LAKE. TENNIS COURTS, GYM, CLUBHOUSE, POOL. DEEDED DOCK.

Here are the financials -

• The property was purchased for $600,000 in August 2007.

• The first mortgage was for $480,000 with in ARM in August 2007 with JP Morgan Chase.

• A second mortgage was opened the same day in August for $50,000 with JP Morgan Chase. This loan was closed about a month after the purchase.

• The property is currently for sale through a realtor for $549,000.
  

The owner of this property put almost 88 percent down on the property. After paying off the second mortgage a month later the initial investment was 20% of the house price or $120,000. However the owner purchased an expensive property in a falling market and will not get close to their original purchase price.

The current selling price is just under 10 percent lower than the purchase price from a year ago. If they owner receives the full asking price (which is not likely if a relocation is involved and a quick sale is needed) with the realtor fees our featured seller will lose a minimum of $83,940 on a one-year investment.

Lately losses of this quantity are usually only seen on the lenders side. This is a huge loss for an individual to absorb. For most people in this area $84K is well over a years salary - gone, just gone. Some companies do pick up some of the losses on relocation. Hopefully this is one of those cases.