From Realtor Magazine Online, Daily Real Estate News July 29, 2009
David Bach, author of The Automatic Millionaire Homeowner: A Lifetime Plan to Finish Rich in Real Estate, pooh-poohs the notion that it makes any sense at all to walk away from a property that is underwater.
In an interview with the AOL.com personal finance Web site, Walletpop.com, Bach said about 50 percent of homes in foreclosure are there because their owners walked away from underwater real estate. He calls that “stupid, short-term thinking” and recalls a condo he bought in New York City in 2003. He put down $600,000, then property values dropped and he lost all his equity. “I was bummed,” he said.
But the loss wasn’t permanent. Four years later he sold the condo for $3.65 million – and made a $1.5 million profit, after commissions and taxes.
Some people might have thought it was “logical” to walk away, he said. “But it would have cost me $1.5 million.”
Source: WalletPop, Zac Bissonnette (07/23/2009)
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