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Extreme makeover
Old 07-29-2008, 07:01 AM   #1
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Extreme makeover

Thought this was fascinating:
washingtonpost.com
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Old 07-29-2008, 07:15 AM   #2
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These people have a history of leaving little problems for the homeowners.

The Columbus Dispatch - Local/State

Got a FREE BIG house? Get ready for some BIG utility bills and BIG tax bills.
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Old 07-29-2008, 07:24 AM   #3
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For the benefit of others: The OP is a link to a story about a home that was the subject of an episode of the TV show "Extreme Makeover." The home, located in Atlanta, is now in foreclosure.
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Old 07-29-2008, 07:36 AM   #4
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Samclem, thanks for clarifying. I guess I was just so flabbergasted, I didn't know what to say! Here is more: "When they returned, they had the biggest house on Ahyoka Drive, with all the appliances and furnishings, plus enough money to pay taxes on it for decades, plus a fund to send their children to college.
The house will be auctioned off, according to the Atlanta Journal-Constitution, next Tuesday on the steps of the Clayton County Courthouse.
The Harpers had used their home as collateral on a $450,000 loan from JPMorgan Chase and fell in arrears..."

So it wasn't even that they got this new, big house and then couldn't pay the taxes & utilities. I'm just shaking my head.

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Old 07-29-2008, 08:17 AM   #5
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Originally Posted by samclem View Post
For the benefit of others: The OP is a link to a story about a home that was the subject of an episode of the TV show "Extreme Makeover." The home, located in Atlanta, is now in foreclosure.
It reminds me of all the lottery winners who wind up broke in a couple years. Give something of significant value to someone who has never learned how to manage their money or build wealth, and this is what you get.
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Old 07-29-2008, 08:38 AM   #6
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Originally Posted by cj View Post
Samclem, thanks for clarifying. I guess I was just so flabbergasted, I didn't know what to say! Here is more: "When they returned, they had the biggest house on Ahyoka Drive, with all the appliances and furnishings, plus enough money to pay taxes on it for decades, plus a fund to send their children to college.
The house will be auctioned off, according to the Atlanta Journal-Constitution, next Tuesday on the steps of the Clayton County Courthouse.
The Harpers had used their home as collateral on a $450,000 loan from JPMorgan Chase and fell in arrears..."

So it wasn't even that they got this new, big house and then couldn't pay the taxes & utilities. I'm just shaking my head.

CJ
I guess we know that financial illiteracy is still rampant in America.
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Old 07-29-2008, 09:22 AM   #7
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This article immediately made me think about the lottery winners who squander away all of their money on silly things. A lot of times when you give people things for free, they waste it, but if they had achieved it on their own, they would have made completely different choices. Though I do feel bad for the people who get these great home upgrades for the show, but they can no longer afford to live there. I wonder if there is anything in the contracts stating that they are not allowed to sell the house...
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Old 07-29-2008, 09:25 AM   #8
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It reminds me of all the lottery winners who wind up broke in a couple years. Give something of significant value to someone who has never learned how to manage their money or build wealth, and this is what you get.
Perhaps a little different from what you are mentioning, but I have always been fascinated, understand, and agree 100% with the millionaires who keep cutting coupons, buying used cars and conserving gas. Many wonder why they keep doing it because they can now afford not to. My answer has been: Have you ever wondered how they got that way?
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Old 07-29-2008, 09:36 AM   #9
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Though I do feel bad for the people who get these great home upgrades for the show, but they can no longer afford to live there. I wonder if there is anything in the contracts stating that they are not allowed to sell the house...
It says in the article that they were given enough money to pay the taxes on the house for years. Instead of using that money for taxes and the college fund for their kids' college they spent it all and took out a $450,000 loan on the house and apparently spent that too.

I can only assume some kind of drug/gambling addiction is the root cause. He runs a security business which in my mind says ex-meth user who decided now that he was rich* he could get back in the game with no consequences.
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Old 07-29-2008, 09:53 AM   #10
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"Winning homeowners go bust" is a pretty popular theme, and HGTV has used their "Dream House" contests to generate the kind of publicity that just keeps on giving:

The House that Swallowed Don and Shelly Cruz - AOL Money & Finance

HGTV "Dream House" sale - Google Search

Before you enter a contest to win a large illiquid asset, you should ask yourself: "Hey, who's paying the taxes on this honker?" But then the kind of people who enter this type of contest are rarely likely to ask that sort of question.
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Old 07-29-2008, 10:08 AM   #11
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Earlier stories said they had started a construction business and used the house as collateral for that, but the business didn't go well. Now I'm seeing home security, not construction. I wonder what the real story is?
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Old 07-29-2008, 10:13 AM   #12
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They really oughta have the show or some other entity maintain an interest in the property to prevent it from becoming mortgaged or sold without the third party approving.

Its stuff like this that makes people who donate time and money to the needy a little less interested in continuing with it.

I guess the good news is that the show could swoop in, pick the house up for cheap from the bank after foreclosure and let another needy family move into it... :
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Old 07-29-2008, 10:26 AM   #13
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But then the kind of people who enter this type of contest are rarely likely to ask that sort of question.
Hey I've entered them. Why not?

But we've always known that if we happened to win, we'd be liquidating the assets. There's no way we'd be living in that kind of huge, resource-draining house. But I've often wondered what happens to the winners of these things. No surprise that it often results in financial disaster.
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Old 07-29-2008, 10:48 AM   #14
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"In the 10 years that HGTV has run the contest, the Cruzes are the only winners who've chosen to live in the Dream Home.

Most of the rest sold, happily pocketing the cash."
That's interesting. It makes sense but I figured that more would have tried to actually live in it; and have it drag them down.

Quote:
"The Cruzes say they too had offers, for millions. But as soon as Don saw the house, he was determined to find a way to make it home."
Uh, oh!

Quote:
"Don found out that he doesn't own the land under the house but instead has a 30-year lease"
Interesting. Some handcuffs come with this great deal. I wonder why it's set up this way?

Quote:
"Upkeep is $2,900 a month. Homeowners insurance runs $7,000 annually. The insurance and gas bill on the Cruz fleet (they own seven vehicles, including the SUV they won in the contest) costs $1,000 a month."
And it goes on...

How on earth did he/they think this would work?
Quote:
"The upshot: The Cruzes have just $36,000 left from their winnings. What's more, to pay off the tax bill, as well as cover other expenses, they had taken out a $1 million loan. Monthly payments on it are around $8,000. They won't be able to pay it off in full until they sell the house."
UFB! I don't know what to say. They've finally realized the folly of their ways but it was an expensive lesson. I hope their time in the house was worth the huge amount of money they've blown in the process.
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Old 07-29-2008, 10:56 AM   #15
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That is absolutely unbelievable, just WOW. I did not realize that so many of them agreed with me that I would just sell the house and invest it. But, they seemed like they wanted to own 7 cars, take out a million dollar loan pay $7k a year in homeowner's insurance and $2,900 a month in upkeep. That is a pretty big drain on your money.
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Yes...
Old 07-29-2008, 10:56 AM   #16
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Yes...

White elephant - Wikipedia, the free encyclopedia

receiving a gift of a white elephant from a monarch was both a blessing and a curse: a blessing because the animal was sacred and a sign of the monarch's favour, and a curse because the animal had to be kept and could not be put to practical use to offset the cost of maintaining it.

- Ron
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Old 07-29-2008, 10:59 AM   #17
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Its stuff like this that makes people who donate time and money to the needy a little less interested in continuing with it.
I've heard that complaint from Habitat For Humanity volunteers-- when the "sweat equity" family rolls up to the home site in an expensive SUV.

I guess that volunteers have to do it because they believe in the cause, not so much in the beneficiaries...
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Old 07-29-2008, 11:09 AM   #18
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I've heard that complaint from Habitat For Humanity volunteers-- when the "sweat equity" family rolls up to the home site in an expensive SUV.

I guess that volunteers have to do it because they believe in the cause, not so much in the beneficiaries...
I believe that you will find that in some instances, where you are taking care of the day-to-day care of the receipients of your volutnteer work, it is a "positive force".

I'm speaking about the folks that contribute to food banks, serving meals for the needy (e.g. the folks that have come upon hard times) or what I do (OK, I'm promoting Meals on Wheels again).

When I deliver a meal to an elderly/handicapped/shut-in, and they just give me a simple "thank you for your concern", it means a lot.

In my case, the "beneficiary" is giving me direct feedback (in fact, 1-2x week, depending on my schedule).

Not to debate, but to just give an example of volunterism that is "good"...

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Old 07-29-2008, 11:19 AM   #19
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I'm speaking about the folks that contribute to food banks, serving meals for the needy (e.g. the folks that have come upon hard times) or what I do (OK, I'm promoting Meals on Wheels again).
We've been donating to:
- Institute for Human Services (local homeless shelter)
- Hawaii Foodbank
- AccesSurf Hawaii
- a non-profit that gives grants to kids to participate in taekwondo and travel to tournaments
- DonorsChoose.org
- United Through Reading

We've been learning that donating the money gives us more value than donating our time. Maybe someday that'll change.
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Old 07-29-2008, 11:57 AM   #20
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