anonymous456 at vancouvercondo.info 22 Jun 2010 1:01 pm -
“I’m an accountant, I do A LOT of tax returns, self-employed and employed, and I don’t often come across too many young people making over $60k. If I do, they have been in the workforce for at least 10 years, or if they’re lucky, they’re in trades. Today I did a return for someone who owns a house he’s renting out. The mortgage balance is $350k and he’s cash flow-negative by at least $400/month. The house is now for sale, for just a bit over the mortgage amount. His net self-employed income over the past few years has been about $15k. Yes, $15k. Oh and his balance sheet shows an overdraft in the bank nearing $100k. How did he get the mortgage? I have no idea, I guess it’s some fancy “self-employed stated income thingy”. It boggles my mind. And I really wish I could say that this is unusual case, but this year I have more clients who are in that position-drowning in debt, huge mortgage, moderate-to-low reported income (and if he DID have significant unreported income, why would he carry an overdraft balance of $100k, paying tens of thousands in interest?). Now ask me if I think the market won’t fall. People are leveraged to the max. This isn’t going to end well, the numbers say it all.”
this guy needs to get some better clients …
His hourly rate probably doesn’t differ by ‘quality’ of client.
Why would someone who nets $15K/year be paying an accountant to do his taxes for him anyway?
Not surprised one bit. He probably has a grow op in the basement.
when did he buy? if he bought within the last year, chances are he is underwater. if he bought several years ago then he’s ahead.
Not necessarily -> possible case of ‘RE ATM Syndrome’.