Extreme Makeover Home Foreclosure. What went wrong?
There was a little foreclosure in the news that caught my eye yesterday. A home featured on Extreme Makeover Home Edition is facing foreclosure. Milton and Patricia Harper of Lake City, Georgia were the lucky recipients of a complete home makeover turning their old home into a 5500 sq. ft. mansion. It took 1,800 people to get it accomplished. The estimated cost of the home and donated materials? $450,000. It looks like the dream is over for the Harpers.
Though this is somewhat original, I feel I’ve read something similar in the past. Often it turns out that people get themselves into trouble either furnishing the home, or paying for the utilities that the home requires. Many people forget that home maintenance is not free. It’s not often provided by the game shows, but in this case it was. As if the Harpers weren’t lucky enough the family received a quarter-million dollars – including a home maintenance fund and scholarships for their three Harper children.
In this case, the Harpers may be losing their home for an entirely different reason. Depending on what you read they either took out $450,000 or $575,000 in loans against the home. The loans were to start a business. It appears that the business isn’t doing so well considering the news.
I’m generally a pretty risky guy. I have a lot of my money in aggressive growth funds. One of the things that has always stopped me from going all out on a business venture is this problem that the Harpers encountered. Instead, I would look to build businesses slowly and not risk losing my home like the Harpers might.
As a veteran of 3 start-up/early stage companies I have a lot of experience dealing with issues related to creating and sustaining a new business … and it’s not easy. It’s always surprising to me how many people jump into a new business, sink large piles of money into it and really have no idea what they are doing. I have no data to back it up, but my opinion is that this is the primary reason why there is such a high failure rate amongst small businesses. People just don’t know what they don’t know.
I feel sorry for them, but I know they were trying to live outside of their means. They were not used to have something with that value so when they received the new house they didn’t know what to do with it. This is the reason that we are currently in a housing crisis. I see it every day, the banks were loaning huge amounts of money for houses with no regard as to how the loan was going to be paid back.
The Writer's Coin says
It’s a great show, let’s be honest. Viewers like me get to see some great drama, shed a few tears maybe. The networks get good ratings and the families get a new home.
I think it’s one of the rare shows that actually does good in the world in exchange for ratings. The perfect show.
I used to enjoy the show (in fact, my chiropractor was the recipient of a makeover) until the 100th show where they basically made over a home that didn’t really need making over in the first place. With all the families in this country who are in desperate need of even basic housing, I think the show has completely lost its direction at this stage in its evolution. This story is the perfect example. (5500 square feet? Come on.)
I’ve only seen bits of it but actually think it’s a rubbish show – way too schmaltzy and feeling too much like an extended ad, and the host is irritating beyond belief. And I think the series of stories like this one (FMF had posted a few of them) prove that it’s one remaining saving grace – that it does some good – isn’t necessarily true. Probably building people a modest extension or renovating what they do have would help much much more, but wouldn’t make for vomit-inducing sickly sweet TV.
Living Off Dividends & Passive Income says
Considering that the average american spends 30% of their income o house, when you’re house is paid off, you should be scaling back and playing golf, not starting a risky business.
thats just stupid!