Family home and 3 buy-to-lets - going for a PIA

[Baby blues]

As I said, like others, this isn't a get at broke guy situation, sorry if you seem it is but i think when everything settles for you and if it does in they way you outline then you will realise having a house in the area you chose to begin with close to work and I presume schools is worth more than a house in an area you hate with a massive loan for neg equ investments and not being able to ever move will perhaps bring you some comfort - I genuinely hope you get a good outcome and look forward to any update that you feel you want to share in the future.

 

[dub_nerd]

I sense this is a moral "lashing" more than advice. Well I am sorry if you think I went mad, well I didn't. Two people have small properties get together and buy a house but keep the other houses = 3 houses. Hardly nuts when you got to consider that those some people don't have the jackpot pension public servants have so have to save for their own (e.g. rental income) and/or needed to buy a larger house (3 bed is all) for their 2 children.

The 4th property was excessive but the debt on that is actually only €45k.

Anyway...

Huh? How many people have nearly €400k in a pension pot in their late twenties/early thirties (the amount you said the loans were for). If it was supposed to be a pension investment you have to realise that a) you borrowed it rather than earned it like most people investing in a pension have to do before they can invest it, b) you invested it in a single asset class in a single market, the antithesis of sensible pension investing, or any kind of investing. Sorry, but it was nuts. The only reason it doesn't seem that way is because so many other people did the same nutty thing. After the Wall Street Crash it was forty years before investing your pension in the stock market stopped looking nuts (when people forgot how nuts it was).

Other people have lost money on their pensions and had to suck it up. You're getting your abysmal investment decisions written off. I'd say complaining about it is pretty rich to be honest.

 

[BrokeGuy]

Dub Nerd, many thanks for your incredible advice - so valued. Guess I am the fool here 'cos people don't use property for pensions even though a high percentage of pension funds are both directly and indirectly invested in property. Guess they are wrong too.

Remember those who lost on pensions got tax relief on the contributions so those losses have been subsidised too.

It is fine, the normal joe soap without the absolute sickening and bankrupt inducing pensions of the civil service has three options; invest in property, invest in pension or do nothing. I did the first option, it failed but it was logical at the time. Not everyone is in a situation where a teacher can retire in mid 50s with a pension essentially worth €1.5m when valued against an annuity - that is the real injustice not the normal guy who took on a second property to assist for the future years.

 

[so-crates]

Dub Nerd, many thanks for your incredible advice - so valued. Guess I am the fool here 'cos people don't use property for pensions even though a high percentage of pension funds are both directly and indirectly invested in property. Guess they are wrong too.

Remember those who lost on pensions got tax relief on the contributions so those losses have been subsidised too.

It is fine, the normal joe soap without the absolute sickening and bankrupt inducing pensions of the civil service has three options; invest in property, invest in pension or do nothing. I did the first option, it failed but it was logical at the time. Not everyone is in a situation where a teacher can retire in mid 50s with a pension essentially worth €1.5m when valued against an annuity - that is the real injustice not the normal guy who took on a second property to assist for the future years.

1) Civil Servants are "normal joe soaps"
2) You didn't have a pension plan, you had an aspiration that the property you borrowed money to buy might one day form the basis of a secure income in retirement

You can't garner sympathy for a position predicated on bashing someone else because they have not shared your misfortune.

You took a series of steps which resulted in you borrowing way beyond your means and are now suffering the consequences. This has nothing whatsoever to do with public sector pensions. You didn't borrow money because of public sector pensions and you have not become broke as a result of public sector pensions.

I have said it already, you have to take control of your situation and change your attitude, it is deeply unhealthy for you. Dwelling on and mulling over perceived "wrongs" will get you nowhere fast. You will simply embitter yourself.

You are being given a massive help and an enormous hand out, though from your posts I am sure you don't see it that way. Take a deep breath, and deal with the fact that despite the size of the debt forgiveness you will benefit from there is still much that you will have to handle.

 

[daftpunk]

BrokeGuy;
Have you actually received assurance the debt will be written down from your p.i.p or is this your hope?

 

[Cantalia]

Hello broke guy.
You are in the darkest hour now. On my reading no one is giving you a moral lashing. The responses seem fair and honest to me. Although you are not seeing it at the moment you are really not that bad. Ivan see light at the end of the tunnel yates for you!

 

[honest]

Dub Nerd, many thanks for your incredible advice - so valued. Guess I am the fool here 'cos people don't use property for pensions even though a high percentage of pension funds are both directly and indirectly invested in property. Guess they are wrong too.

Remember those who lost on pensions got tax relief on the contributions so those losses have been subsidised too.

It is fine, the normal joe soap without the absolute sickening and bankrupt inducing pensions of the civil service has three options; invest in property, invest in pension or do nothing. I did the first option, it failed but it was logical at the time.

+1. There was another option ; you could have invested in shares. If you were patriotic, you could also have invested in the Irish stock market (instead of abroad) , where most of the blue chip plc's were banks. You did not do that. You invested in the Irish property market, which as you said was logical at the time, and it was even encouraged by the government through section 23 / section 27 tax incentives...as the government wanted people to, and needed people to, invest in the housing stock of the country. I do not blame you for your past actions - you wanted to provide for your own pension needs and was sold the wrong products in a market which you thought was regulated.

That being said, you are where you are. In my humble opinion a previous poster was right, as was Ben Dunne when he was asked about a similar persons debt recently. Go to Newry or Wales or wherever in the UK. Its a better governed country and the madness that went on here did not happen there, at least to the same extent. You can come back in a years time debt free.

 

[Jim2007]

Thanks for the advice for an obvious novice here but all I am saying is that starting a repayment plan on a loan with a loan to value of 192% is madness. Seriously. Say it out loan, 192%.

Two people have small properties get together and buy a house but keep the other houses = 3 houses. Hardly nuts when you got to consider that those some people don't have the jackpot pension public servants have so have to save for their own (e.g. rental income) and/or needed to buy a larger house (3 bed is all) for their 2 children.

The 4th property was excessive but the debt on that is actually only €45k.

You invested in four properties! It went wrong and now you expect society to carry the can for you, seriously? If we followed your logic and compensated everyone who made a bad investment during recession, the country would go bankrupt in a matter of weeks!!!

If you are in a position to repay your debts then of course you should be required to do so.

 

[Luternau]

I don't think you are get the predicament you are in. You are being offered a fresh start by BOSI, who are probably the best bank you could be with in this circumstance, but you want more....or feel entitled to more ....?

Have you not realised how lucky you are? Read the threads here from people with no income, and struggling with one home, which the banks are threatening to repossess. You don't even come close to the stress and austerity they are enduring. They would love more-but more is a feint hope for them.

Move on and stop blaming others or comparing to others, specifically civil servants, and their pensions etc. You dont seem to understand the first thing about pensions. For example you could have sold the properties (not bought the 4th) and bought one family house with little or no borrowings and then created a substantial pension fund from then on.

It's too late now to lament on values paid borrowed etc. Your money invested is gone. Just like you did not know what the future would be with 4 properties you don't know what it will be with just one! Grasp the opportuntity to find out. You have nothing to loose and things will improve.

 

[commonsense]

Dub Nerd, many thanks for your incredible advice - so valued. Guess I am the fool here 'cos people don't use property for pensions even though a high percentage of pension funds are both directly and indirectly invested in property. Guess they are wrong too.

Remember those who lost on pensions got tax relief on the contributions so those losses have been subsidised too.

It is fine, the normal joe soap without the absolute sickening and bankrupt inducing pensions of the civil service has three options; invest in property, invest in pension or do nothing. I did the first option, it failed but it was logical at the time. Not everyone is in a situation where a teacher can retire in mid 50s with a pension essentially worth €1.5m when valued against an annuity - that is the real injustice not the normal guy who took on a second property to assist for the future years.

Civil Service pensions are mandatory, they are not an option.
If Civil servants invested in property, then they too either borrowed money they didn't have or used the money they earned, after tax to do so.

Unlike you though they may not be able to opt for the PIA.
If they do then you can be sure that any "write-downs" they get will include a chunk of their income and their pensions as part of the deal.


The reason this country is broke has nothing to do with CS pensions. The reason we are broke is because too many people borrowed long term money on the basis that house prices would only ever rise.

@Honest. He could have chosen to sell both properties when he met his OH.
He chose to borrow to buy another one. Then he made another choice to buy yet another one.
His cribbing about Civil servant pensions is pretty ironic. He feels "entitled" to buy property out of money he didn't earn for his pension, yet at the same time he lashes out at Civil Servants who work and pay actual money into these pensions.
He also says that even those people who have lost pensions had "their losses subsidised" - so while he moans about losing money he didn't earn and that he doesn't have to pay back (3 investment properties), he shows an absolute lack of regard for people who invested and lost "real earned" money into pension schemes.

He says that he "had to save for his pension", but that isn't what he did. He didn't save, he didn't use money he "earned". He speculated.

He says he "invested" in property. No he didn't.

He wants (and is getting) his 3 investment gambles written off.
He wants (and is getting) his loans written off.

But that is not enough for him. Because he now wants his "new" mortgage to be based on the current value of the home, he wants the NE written off.

He sympathises with the normal "Joe Soaps", yet who does he think is picking up his tab?

He rages against Civil Servants - who are also picking up his tab.

Much like in the boom he (and many others) wanted the "easy" way in.
No he wants the easy way out.

 

[dereko1969]

+1 commonsense

 

[honest]

He says that he "had to save for his pension", but that isn't what he did. He didn't save, he didn't use money he "earned". He speculated.
He says he "invested" in property. No he didn't.

In fairness to the OP, you do not know that. I would suggest that he and his partner did indeed save towards their pension, and did use money they earned towards their pension. Each, I gather, had a property when they met. I would assume they did not get 100% mortgages on each of these, and at least some of the capital has being paid off. I also assume they put some time, money and effort in to the two other properties. From the amounts involved, the properties involved are probably modest properties in modest locations....some couples have their own dwelling house worth more that this couples pdh and 3 investment properties together. I think the OP's point was that he wanted to provide for his familes future / rainy day / his pension. Section 23 and section 27 pension investments were a government scheme to encourage / incentivise people to invest for their pension, while having the spinoff for the government of increasing the quantity and quality of housing stock in the country ( that was the aim at the time ) and generating employment / taxes for the government.

He feels "entitled" to buy property out of money he didn't earn for his pension, yet at the same time he lashes out at Civil Servants who work and pay actual money into these pensions.

I think the point he was making was that he did put his earned money in to his pension, and yet the public servant now retired with pensions worth the 1.5 million figure he mentioned ( if you were to buy them ) did not contribute anything like that in to those pensions. Commonsense, you have to see both sides of the argument. Lithernau is correct in that his "invested money is gone". Rather than be in deep debt in 3, 6, 10 or 20 years time, he should go to Newry or Wales/ England and go bankrupt there. He is not doing the best thing for himself or his family if he stays here. I think the OP feels the system is unfair and he is correct, and he should leave.

 

[commonsense]

In fairness to the OP, you do not know that.

I do, because the OP says it:

"I am dealing with a PIA where essentially what will happen is that I will lose 3 rentals and probably keep my own home. The three rentals are worth maybe €170k in total (yeah!) and the loans are a juicy €380k (bigger yeah!)"

I would suggest that he and his partner did indeed save towards their pension, and did use money they earned towards their pension. Each, I gather, had a property when they met. I would assume they did not get 100% mortgages on each of these, and at least some of the capital has being paid off. I also assume they put some time, money and effort in to the two other properties. From the amounts involved, the properties involved are probably modest properties in modest locations....some couples have their own dwelling house worth more that this couples pdh and 3 investment properties together.

I think the OP's point was that he wanted to provide for his familes future / rainy day / his pension. Section 23 and section 27 pension investments were a government scheme to encourage / incentivise people to invest for their pension, while having the spinoff for the government of increasing the quantity and quality of housing stock in the country ( that was the aim at the time ) and generating employment / taxes for the government.

Wow, lots of assumptions. He did not invest actual money. If he and his OH lived in their respective single homes then they paid to have a roof over their heads - like renters do.

When they turned them into "Buy to Lets" then the tenants paid the rent, which presumably paid the mortgages.

I think the point he was making was that he did put his earned money in to his pension, and yet the public servant now retired with pensions worth the 1.5 million figure he mentioned ( if you were to buy them ) did not contribute anything like that in to those pensions.

He did not put his earned money into his pension. He speculated on property.
And why blame the Public Servant on the terms and conditions of their jobs? Actually why even bring them up?

Commonsense, you have to see both sides of the argument. Lithernau is correct in that his "invested money is gone". Rather than be in deep debt in 3, 6, 10 or 20 years time, he should go to Newry or Wales/ England and go bankrupt there. He is not doing the best thing for himself or his family if he stays here. I think the OP feels the system is unfair and he is correct, and he should leave.

The OP is free to do whatever he chooses, that is not the point. The point is that he appears to be able to avail of a service that will write off a large chunk of his debt - he is not happy with that and he wants more - I would hazard a guess that moving out of Ireland for a year is simply too much work for him.

As to looking at both sides? Seriously? How about you and the OP having a look at the responsibility of the borrower instead of only looking to Public servants, the government and the banks for the massive failures in this country.

Yes there is blame certainly, but every borrower has to look at their own part in this mess.

 

[honest]

When they turned them into "Buy to Lets" then the tenants paid the rent, which presumably paid the mortgages.
.

Thats a huge assumption on your part, and you make a further assumption that the OP paid nothing in to the properties. Rent usually does not cover mortgages, its unlike the OP got 100% mortgages on all properties, I gather there was a period when the OP were living in a property each before they met, who do you think pays the mortgage when the "inbetween" tenants, who do you think pays management fees / repairs / outfitting etc, stamp duty when purchasing etc.

He did not invest actual money.

He did not put his earned money into his pension.

I do not know the OP but, as I explained to you above, I would be extremely surprised if since they bought the properties, it never cost them a cent. I would image it has cost them a lot of money, time and stress.

Yes there is blame certainly, but every borrower has to look at their own part in this mess.

I never suggested the OP was not a least partly to blame. The OP made mistakes. However I think the banks and government are also at least partly to blame for the mess the country is in, and I suggested the OP should follow Ben Dunnes advice and go for bankruptcy - then he will be debt free in a year. If he stays here he will not. You are right though he should not worry about those who have great pensions. They are entitled to them.

 

[dub_nerd]

I think you're missing the point that the OP is getting to keep his PPR. How is UK bankruptcy going to make him better off?

He is getting a good deal. At the end of the day his debts are to a foreign bank, so the saving grace is that he is a burden on the UK taxpayer, not us. He is not part of the debt non-payment problem that may well bring the rest of us to total economic destruction. I do hope the people glibly advocating bankruptcy tourism understand that's where we're heading.

 

[commonsense]

Thats a huge assumption on your part,

I don't see where I am assuming anything.

and you make a further assumption that the OP paid nothing in to the properties.

I said that he did not invest money into a pension. This was in response to where you suggested that he did invest his money into a pension.

Rent usually does not cover mortgages, its unlike the OP got 100% mortgages on all properties, I gather there was a period when the OP were living in a property each before they met, who do you think pays the mortgage when the "inbetween" tenants, who do you think pays management fees / repairs / outfitting etc, stamp duty when purchasing etc.

Are you saying that the OP had 3 rentals that did not cover the mortgages of the Buy to Lets? Are you saying that he didn't sit down and do the sums? Are you saying that he depended completely on property going up, rents never going down and a 100% occupancy at all times?
Are you saying he didn't figure management fees/maintenance and all the other costs of this into his calculations?

Are you saying he took a gamble?

I do not know the OP but, as I explained to you above, I would be extremely surprised if since they bought the properties, it never cost them a cent. I would image it has cost them a lot of money, time and stress.

I don't doubt it. But let me explain to you. The OP borrowed at least 380k for those 3 properties.

They will hopefully be sold for 170k and the balance will be written off. Gone.

He did not invest his own money into these properties, he borrowed it. If he put down deposits then of course he has lost them, it was a gamble.

I never suggested the OP was not a least partly to blame. The OP made mistakes. However I think the banks and government are also at least partly to blame for the mess the country is in, and I suggested the OP should follow Ben Dunnes advice and go for bankruptcy - then he will be debt free in a year. If he stays here he will not. You are right though he should not worry about those who have great pensions. They are entitled to them.

As I said, if he feels that is the route to go then he should. But you haven't addressed the issue where he wants his NE written off as well? Do you think that is fair?

 

[daftpunk]

I've asked OP twice already, without an answer so far, was s/he actually told s/he will be getting these write downs or are they only assumptions.

I think until we get a definitive answer, we are all wasting our time guessing.

 

[honest]

How is UK bankruptcy going to make him better off?

If he stays here, he says "Once the 6 years is over I will then have the luxury of starting a juicy 35 year mortgage for the house which is now worth €150k with the loan of €289k. That loan over 35 years total a repayment of €600k for a house worth €150k. Great."

If he goes to Newry as Ben Dunne says, he will be debt free in a year.

Are you saying that the OP had 3 rentals that did not cover the mortgages of the Buy to Lets?

only he can answer that, but most landlords I gather are finding that rental income is not covering the costs ( mortgage, management company fees, repairs etc ) by a long shot.

He did not invest his own money into these properties, he borrowed it.

but you said he did not put his own money in to his property pension. I'm just after checking the OP's original post, and in fairness to him he paid off 21,000 of the mortgage on one property alone. (the loan was for 310, he now owes 289 he says ). He probably paid a deposit on the property too, as well as stamp duty, outfitting etc. He will lose all that.

 

[commonsense]

only he can answer that, but most landlords I gather are finding that rental income is not covering the costs ( mortgage, management company fees, repairs etc ) by a long shot.

But you can assume otherwise? It may be the case now, but was it the case when he first rented them out?

but you said he did not put his own money in to his property pension.

Sorry, but please do not twist my words, if this is a genuine mistake then that's fine, but I never said "Property Pension", what I said (again) was that he did not invest his money into a pension.

He borrowed money and gambled it on property. This borrowed money that he gambled with is being written off - taxpayers (here or in the UK) are footing that bill.

I'm just after checking the OP's original post, and in fairness to him he paid off 21,000 of the mortgage on one property alone. (the loan was for 310, he now owes 289 he says ). He probably paid a deposit on the property too, as well as stamp duty, outfitting etc. He will lose all that.

I really think you should read his post again. He paid 20k off the house he is living in. He is in exactly the same both as thousands of people - it's called Negative Equity.

 

[dereko1969]

....