My friend “Phil” called me this week and asked me to buy his home …
and rent it back to him until he could get himself “straight.”
But Damn…
How did he get in this situation?
You see at one time Phil had it made in the shade. He used to live in a fourplex. He owned that same fourplex and rented out the other three units. At the end of each month after collecting his rents and paying his mortgage, property insurance, utilities and car payment on his Tahoe (with new rims); he would have to come out of his pocket only $800.
What Happened??
He took equity out of the building to pay bills, take the family on a London vacation, buy his wife a car and fix up the 2 bedroom unit he lived in. Then out of nowhere he got caught up in that buy, buy, buy frenzy of 18 months ago. He sold the fourplex and bought a brand new townhouse. His new monthly “nut” became $2,700 per month.
How do you afford going from $800 to $2,700? ... You don’t.
His credit is bad, he only works part time (performing artist) and there is no equity in his new townhouse, so the bank is foreclosing and taking it. And now he wants me to buy it and rent it back to him. I become his landlord!
I told Phil: “If you were a single man I’d buy that house in a minute, but since you are married … hell no! See if you don’t pay the rent, I have no problem putting your butt out on the street, but not your wife and kids. You better go ask your mother-in-law. She’s vested and won’t put her grandkids on the street. And for now on … you better start carrying a sleeping bag in your car, in case she keeps the kids and changes the locks on you.”
Readers, facing foreclosure and don't have a mother in-law? Here's Help:
***Americans for Fairness in lending
***Freddie Mac’s online guide to avoiding foreclosure,
***National Assn. of Consumer Advocates
***Neighbor Works America
***U.S. Department of Housing and Urban Development
LEGAL HELP: American Bar Association , Legal Services Corp, and the National Assoc. of Consumer Bankruptcy Attorneys