This is the worst of the worst possible scenarios you could encounter.
Others fear this sort of thing will be repeated, over and over again, as people buy second and/or vacation homes, and then are tapped out. If they’ve put little or no down on the second property, they’ll have very little room in which to maneuver, should they have to sell in a hurry.
For now, however, we should all just gloat that we’re not in the same boat.
By Lynn Asinof, Boston Globe
Christy Lochner and Sean DiBartolo trace the roots of their interest in real estate back to Lochner’s purchase of a $200 board game called ”Cashflow 101.” Created by financial author Robert T. Kiyosaki, the game was designed to teach basic financial and investment concepts, with real estate a key part of the strategy.
But when Lochner, 25, and her 28-year-old fiance moved from the board game to real life, they discovered the market can hold some big traps for the unwary. Last year, they purchased a $540,000 two-family home in Medford, but then couldn’t unload DiBartolo’s one-bedroom condo in Brighton’s Cleveland Circle.
Now, almost a year after first putting the unit on the market, the two have an empty condo that’s costing them close to $1,800 a month in mortgage and fees. They also had to take out a $36,000 short-term bridge loan, borrowing against the equity in the condo at a relatively high rate until the unit sells. That loan comes due in October.
”What looked like a no-brainer is turning into a nightmare,” wrote Lochner in applying for a Boston Globe Money Makeover. ”What do we do?“
Complete article: When a ‘no-brainer’ becomes a ‘nightmare’