Tuesday Morning: Tales From the Bubble -- How a 22-Year-Old Stripper Bought 10 Houses
We've written about the California strawberry pickers who bought a $720,000 house, and the investor in Sacramento who bought eight houses with no money down; now another "Bubble Tale" you can repeat at cocktail parties: The 22-Year-Old Stripper Who Bought 10 Houses With No Money Down.
The story in brief, according to the Star-Tribune: Minneapolis stripper (You say "exotic dancer," we say "stripper") Irene Thomas, tired of dancing for a living, wanted to be a landlord. She hooked up with Universal Mortgage, a local company, which noted her good credit and persuaded her to buy 10 houses -- nine of which Universal owned -- for $2.4 million, with no money down. The prices were inflated -- an average profit per house of 30% for Universal -- but Thomas was promised an illegal kickback: $5,000 per house.
Fast forward to the end: Thomas didn't get all the cash back, the houses are in foreclosure, her credit is ruined, and Thomas feels duped by insiders. The Star-Tribune: "The practice is so commonplace that real estate experts say it is helping fuel the nation's foreclosure epidemic, which is destabilizing neighborhoods as home after home is lost to banks and other lenders."