Friday, December 12, 2008

Your weekly dose of schadenfreude

Buy To Let collapse

One man has seen his buy-to-let empire vanish months after he could have sold it for a £500k profit. Former factory worker Rajnikant Raja took just three years to amass a buy-to-let property empire of 40 flats and houses, remortgaging each one to get the deposit for the next. The properties were worth £5.4m at their peak two years ago . But he could lose them all within a matter of weeks. Their value is falling like a stone. Raja cannot afford to keep up the mortgage payments and so far his bank has repossessed five properties. The rest are in negative equity. His £19,000 arrears is expanding by £2,500 a month, as homebuilders flood the market with rental properties, driving rents down. Raja also has unsecured debt (credit cards, loans and overdrafts) amounting to £120,000.

Posted by little professor @ 06:03 PM (2567 views)
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25 thoughts on “Your weekly dose of schadenfreude

  • Cheekie Charlie says:

    Although we criticise BTL on this site they have almost guaranteed total house price crash in this counrty. BTL, Greenbay, Glorious sunshine, I salute you.

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  • mark wadsworth says:

    LP, you have brightened up an otherwise dull and gloomy day!!!

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  • This is symbolic of why we’re in such a mess – Oscar Wilde would have invented a tantalising, succulent, enthralling word to replace the Teutonicly gutteral schadenfreude as quick as you could say ‘Oh yes, there is a God!!!’

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  • Gosh, with all of those repossession orders, Raja will be dodging the credit reference agencies.

    “Raja the Daja”

    Thanks – I’ll be here for all night folks … you’re too kind …

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  • See this article and the comments below it:

    http://www.thisismoney.co.uk/mortgages/mortgages/article.html?in_article_id=418043&in_page_id=58

    Being cocky about housing in March 07 seems a trifle tragic.

    1. I took a Northern Rock 100% mortgage in 2004 and haven’t looked back. I was a first time buyer with little hope otherwise. I took a calculated risk and feel confident in my decision. My home has risen in value by £35,000 since then so I have no regrets. That said, I did my sums carefully and would advise anyone else contemplating this move to do so as well.

    – Mel, Wiltshire
    Posted: 3 March 2007, 12:24pm

    2. Mel, 3 years in the housing market is a very very short time, that £35,000 can disappear as quickly as it appeared, you may feel you did your sums carefully but in my opinion anyone who’s borrowed 100% in the last 3 years is a mug!

    – Grim, Chislehurst
    Posted: 3 March 2007, 3:27pm

    3. Should you take out a 100% mortgage? You can do what you like. Me? NO WAY!

    – Bob, Wilthsire
    Posted: 4 March 2007, 9:24am

    4. If I was a first time buyer now – I would hold off and rent for few years to let the housing market cool first. For me, it’s too expensive.

    Having said that, if you are in a secure career, it’s hard to believe that you’ll have anything other than profit after say 10 years, so any temporary ‘paper’ loss is irrelevant.

    – Brian S, London, UK
    Posted: 5 March 2007, 4:59pm

    5. Grim, I am afraid to say I totally disagree. Mel has made £35000 on an intial investment of nothing (besides fees). I (as do many financial experts) do not see the market cooling for quite a while. Why not make use of these products if it is the only way for you to get on the ladder. If you have the security of a well paid job, but no deposit, I would strongly recommend a 100% mortgage.

    – Chris, London
    Posted: 21 March 2007, 1:23pm

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  • One of the first rules of investing.
    Do not overleverage.
    Factory worker with lots of flats. The perfect.storm.

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  • taxi for mr Said

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  • “Raja him than me” by the way

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  • Sorry Mark, can’t share your enjoyment after all its not some shareholder of the bank who’ll pick up the tab, its us, the taxpayer.

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  • So you think this leech should continue to drain the blood from our children’s dreams and hopes?……and that we should subsidise him?
    It’s a we ALL have to be prepared to halt the march to feudalism for the poor b’stards locked out of the casino.

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  • amend: It’s a price we ALL have to be prepared to pay to halt the march to feudalism for the poor b’stards locked out of the casino.
    OOPS

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  • Cheekie Charlie says:

    On this site we knock BTL but we should really be thanking them for causing total house price crash! Greenbay, Glorious sunshine, we salute you.

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  • mark wadsworth says:

    Bilko, you have just cast a gloomy shadow over the only ray of sunshine that we’ve had today.

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  • I think they’ll be quite a number like this.

    Who on earth oversaw this mess in its creation.

    This guy has also got £120k of other debts.

    I’m sorry but anyone who’s run up bills like this should be looking at prison. A shared cell naturally with the people who provided the funding.

    Pure and absolute greed.

    No better than the couple from Kent, Fergus and Maths teacher who built an empire on the basis houses doubled every 8 years – how are they getting on selling their portfolio – any news anyone ?

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  • serves him right!! I can’t believe that idiots like him thought that property can only go up and up, a Little bit of research reveals the cyclical nature house prices and it’s been going on for hundreds of years.

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  • My favourite new word –
    Shaftenfreude: “pleasure from buffoons getting shafted”

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  • Poor Mr Raja, hope he loses the lot. so if houses are droping 100 quid a day i reckon his empire should be loseing about £120,000 a month He He He

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  • ”Housebuilders who can’t sell their properties are flooding the rental market and charging far lower rents than I can,’ says Raja. ‘In Leicester, one builder is charging £480 a month rent. I am charging £580 for the same type of house – and I need £750 to cover my mortgage.”

    Only Einstein could come up with such a great business model. Must have really impressed them when he presented it to the banks who bankrolled this escapade.

    It’s not just the BTLers who should be eating porridge, the bankers should be right in there with them.

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  • Sounds like he started off rodgering the banks, now they’re *raja-ring* him.

    Yeahh .. I’ve been saving that one for tonight folks …

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  • £5.4Mil divided by 40 is £135K per property.mmmmhhhhh…wonder where they are.

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  • Raja thought he could get rich by ruining other people’s lives. Raja had no talents or skills but thought that he could just chance his luck and make loads of cash and scew society. It’s time for Raja to wake up and smell the coffee.

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  • Raja hym tham mee.

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  • ‘If the Government gave buy-to-let landlords the same breathing space as owner-occupiers, it would give them a chance to offer struggling tenants time to get their finances in order and prevent the home being repossessed and the tenants evicted,’ says the NLA’s Simon Gordon.

    Read that as: If I go down, I’ll take the tenant with me. Give me help now or else!

    Slime.

    —/—

    ‘I bought my first flat in Luton in 2002 – it was worth £80,000 but I got it for £73,000. I never paid full price and after six months I would remortgage and use the equity as a deposit for the next place,’ he said.

    The strategy worked while prices and rents were rising and banks were willing to lend but then the situation was reversed.

    It’s time for a Homer Simpson DOHHH!!!!!

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  • Is tyme for Raja tu sel mani homer den go on da DOHHLA!!!!!!

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  • Johhny come lately:

    There’s talk on the street; it sounds so familiar
    Great expectations, everybody’s watching you
    People you meet, they all seem to know you
    Even your old friends treat you like you’re something new

    Johnny come lately, the new kid in town
    Everybody loves you, so don’t let them down

    You look in her eyes; the music begins to play
    Hopeless romantics, here we go again
    But after awhile, you’re lookin’ the other way
    It’s those restless hearts that never mend

    Johnny come lately, the new kid in town
    Will she still love you when you’re not around?
    There’s so many things you should have told her,
    but night after night you’re willing to hold her,
    Just hold her, tears on your shoulder

    There’s talk on the street, it’s there to
    Remind you, that it doesn’t really matter
    which side you’re on.
    You’re walking away and they’re talking behind you
    They will never forget you ’til somebody new comes along
    Where you been lately? There’s a new kid in town
    Everybody loves him, don’t they?

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