June 11, 2007

2005: 23 year old "leverage is the name of the game" investor and Arizona Republic poster boy. 2007: Failure, foreclosed, fraud and forgotten.

I remember reading the Arizona Republic story on this kid and deciding right about then I had to sell my place, and eventually start a blog to warn others about the housing bubble.

So it was nice to see the mea culpa piece today in the Republic on how the Arizona housing market has crashed, there's a wave of foreclosures, and at the head of the pack is the same kid they had profiled just two years ago, who is now a complete failure, and his houses are in foreclosure.

Come on folks, tell me this wasn't obvious. Even dumb realtors with blogs in Phoenix should have been smart enough to see this coming a mile away.

But of course, they weren't.

From February 2005:

Gambling on housing - Investors squeeze Valley real estate market

Zareh Tahmassebian lives in Las Vegas but has bought 15 houses in the Phoenix area since summer. The 23-year-old mortgage banker is gambling on home values continuing to climb.

Tahmassebian and a partner paid more than $2 million for their Phoenix investment properties and estimate the houses are now worth almost $3 million. They put 10 percent or less down on each house, so only about $300,000 of their own money is on the line.

"Leverage is the name of the game," he said. "Why buy one house with cash when you can buy 10 of them at 10 percent down?"

The partners plan to sell the houses in a year or two and buy more. They aren't worried about rents covering the mortgage payments because they're counting on appreciation. Plus, Tahmassebian and his partner can write off any losses and mortgage expenses.

Flash forward to today:


Investors sparked the run-up in home sales and prices during the Valley's housing boom. Now, they are behind much of the area's rapid increase in foreclosures. At least one-quarter of all Phoenix-area homes to fall into foreclosure this year are owned by investors, according to an Arizona Republic analysis of residential foreclosure records. The number is rising monthly as investors, who relied on adjustable-rate or subprime mortgages to buy properties, fall behind on climbing payments.

Las Vegas mortgage broker and investor Zareh Tahmassebian is among the out-of-state buyers who started the speculator-buying boom in metro Phoenix. In 2004, he was just 23 when he and partners bought 15 houses throughout the Valley. Tahmassebian was so bullish on Arizona real estate that, in 2005, he moved from Vegas to live in one of his Valley homes in Chandler.Now, like so many others, he is losing properties.

Earlier this year, he lost his Chandler house at a foreclosure auction. He owed $490,000 on the property he bought for $464,117 in September 2005, according to public records. Some investors, like Tahmassebian, tapped equity in one house to buy another and now owe more than the home is worth. Others put so little down on homes they are just walking away from them.

53 comments:

U dont know what pain is...... said...

he actually put money down. I imagine theres a lot worse stories than his out there

Anonymous said...

LOOOOOOOOOSSSSSSEEEERRRRRRRRR!!!

Anonymous said...

So long house, hellooooooooooooooooooooooooooo double-wide!!!!!!!!!

Anonymous said...

Uh oh. There's more than one Casey Serin???? He'd better keep his site up for brand awareness!

Anonymous said...

"Leverage is the name of the game," he said. "Why buy one house with cash when you can buy 10 of them at 10 percent down?"
Why just flip one? Down payments are for Sissies. It's the new economy, stupid!

Anonymous said...

This 23 year old did something. He tried, he failed. At least he went out there and took a chance. What did you dickheads do the past 2 years? Oh you blogged. WOW! How exciting.

Anonymous said...

It's great to see losers like this 23 year old MORON get taken to the cleaners and sent back to their burger flipping jobs.

Anonymous said...

"Leverage is the name of the game," he said.

....as the corn cob is shoved up his butt....BRAHAHAHAHAHAHA!!!

Anonymous said...

The real estate investor idiot line appears to have no end: http://www.miamiherald.com/103/story/134684.html

Who does this idiot (Magdiel Guillemi) think he's going to sell to after he buys? Another investor idiot?

The fact is that the retarded home builders in Florida that are pressuring for the tax cuts have no clue that a tax cut will not bring back construction. Nobody even considers taxes when the buy a home. They are clueless and only a year later realize the size of the tax bill. The reason that construction has come to a hlat is not because of high taxes on real estate. It's because there are too many houses already. Foreclusores at all time highs. There are more houses that need to be absorbed.

blue balls said...

I remember this tool. He is going to be waiting tables at the local casino soon.How in the hell are people so darn stupid and gullable these days?

Peahippo said...

This is the fine art of a news article saying one thing while delivering a totally different (even diametrically opposed) message.

Either the words are straight yet the message is crookedly arranged on them like they were a scaffold, or the words are ambiguous and the message is even more sloppy arranged. The effect is basically the same: there's what they said, and what they meant.

In the case of the original article, they correctly identified Tahmassebian as "gambling" with "leverage" verbatim. However, the tone of the article is markedly in favor of having people gamble with buying and selling homes, even to the point of using extreme leverage to do so. The news reporter and editor were just conspiring to make sure that extreme leverage would become normalized. Since modern reporters are rather dull blades -- being subservient yuppies most concerned with a steady corporate paycheck -- it's easy to see how they would believe in such an approach and NOT see the terrible endgame that we're just starting to work through right now.

Even the "honest" recent reports of the housing crash are consistently couched in terms of disbelief, transitoriness, and alternatives. Basically, even the honest reporters and editors don't believe there really is a housing crash; don't think any such crash will last long at all; and that there are so many alternatives that crashed buyers will dig their way out of the mess somehow. It's a mark of the intense propaganda system in America that the truth is exactly the opposite to all of these hopes and assumptions.

Pop said...

Isn't he the one who couldn't figure out how to drive to some of his properties? What a tool.

RealEstateGenuis said...

Then: "Why buy one house with cash when you can buy 10 of them at 10 percent down?"

Now: Oh, so THATS why! My bad!

Anonymous said...

Gee,
What a surprise. Where is this clown from? The name sounds foreign and so is Casey whatshisname and my bet he's another "immigrant" who has come in and stolen money to get rich quick. Unbelievable. Can I go to Russia and borrow millions with no job and then default? When is this freakin country going to wake up with immigration? Some berry picker shows up in CA and makes 15k/yr as an illegal and they get 700k? Good Lord, we are in big trouble.

Benjamin Franklin said...

Also from the article:

For the neighbors of homes in foreclosure, it doesn't matter who bought the house or where they are from.

"The people expecting to invest and get a quick flip are likely behind many of the new investor foreclosures in Phoenix now," Sullivan said.

"But the people suffering the most now have primary residences in neighborhoods that are now surrounded by those foreclosure properties."

Fisher doesn't have to sell her home now, but she would like to. She is afraid the investor-owned properties in her neighborhood will pull down her values.

But some homeowners who do need to sell could be stuck. Mary Gomez, a West Valley real estate agent with Realty Executives, said some homeowners in neighborhoods with too many investment properties are having trouble selling.

"There are regular homeowners who need to sell but can't now because of all the investor properties for sale or in foreclosure in their area," Gomez said.

"Some of those homeowners might lose their homes."



Great article. I saw another one yesterday in a local paper that was similar, and will hunt it down on-line. It was almost as if it had been written by a HPer, since it hit all the major points.

About the article above:

Neighbors get hurt, not only by being unable to sell, and by living next to an abandoned disheveled house, but also by paying more in property taxes, insurance, etc.

People don't stop to consider that rising values property values, while appealing to their egos (so they can think, "hey, I'm getting rich here") actually ends up COSTING them out-of-pocket for no good reason (unless they were intending to sell at the peak of the market)!

And even if they DO decide to sell at peak (too late now, BTW), they'll end up paying MORE for the new house, too, so not realize any NET gain. All they have is greater access to leverage, which clearly got these fools above into a lot of trouble....

So for the average person who bought their home to be a place to live (gasp!), the run-up is getting them NOWHERE, even losing them $$$. The costs of thew flipper is diffused, and diffused to society.

Hence why this bubble was primarily an investment-driven phenomenom, with Carleton Sheets late-night T.V. watchers attempting to make their dream of wearing a gaudy hawaiian shirt mid-week a reality....

It's worth realizing that inflated home valuations primarily benefits the following groups:

1) flippers, who were smart enough to exit the market before it turned.

2) State tax agencies

3) Mortgage brokers (who get a larger premium on a higher-priced home)

4) Real estate agents (5-6% commission on an over-valued asset is always good)

So the reality is during the run-up, neighbors were actually paying for the ego gratification just to tell themselves, "hey, I'm getting rich here", even though they were actually paying for the run-up and didn't realize it.

Equity gains aren't 'real' UNTIL they're converted into CASH by divesting (selling).

It's all about the false appearance of getting rich, or using a home to get more loans to make you think you're getting richer. The cycle ran amok, and hence where we are today where greedy pigs artifically created hyped demand, selling to other greedy pigs (while 1st-time buyers who didn't want to gamble got squeezed out of the market).

Anonymous said...

******************************

22, 23, 25 ......and?

Making a killing with the big boys!

They fly high, Burn brightly, then all come crashing down wearing their ass for a hat!

My father, a retired realtor and land broker. Who worked in San Diego from '72 thru to '95, had his own business, worked very long hours. Never in his wildest dreams did he look at the job as a get rich quick scheme!
This was a job about helping people find a place to live, or to build their dream.
He made a living and lived very modestly, and retired with some dignity!

I realize that it was a different time, but The arrogance of this new young bunch!

Anonymous said...

It's not that real estate agents didn't see it coming. Of course they saw it. But real estate agents are liars and thieves, and they'll say or do anything to sell a house, no matter how corrupt the conditions.

sammy said...

here is the a$$hole, from the cover, all pimped out and pompous:

http://bigpicture.typepad.com/comments/images/fortune_may_30_cover.gif

homedebtors suckered said...

Yet another homedebtor ends up in his parents' basement. HAHAHAHA

I want to know what his next plans will be so I can short that sector.

Pop said...

"This 23 year old did something. He tried, he failed. At least he went out there and took a chance. What did you dickheads do the past 2 years? Oh you blogged. WOW! How exciting."

I bought a home in 2001, thought about moving up in 2003, decided against it, and started saving tons of money waiting for the day idiots like this went belly up.

Anonymous said...

hey dumbfucks what was that about stocks crashing beacuse of higher bond yields?

Keep working the 5% CD. Keep renting and paying my mortgage for me. Dolts.

paulin08 said...

Anonymous said...

This 23 year old did something. He tried, he failed. At least he went out there and took a chance. What did you dickheads do the past 2 years? Oh you blogged. WOW! How exciting.

June 11, 2007 12:06 PM

HAHAHAHAHAHAHAHAHAHAHAHAHAHAHAHAHAHAHAHAHAHAHAHAHAHAHA!

Anonymous said...

"hey dumbfucks what was that about stocks crashing beacuse of higher bond yields?

Keep working the 5% CD. Keep renting and paying my mortgage for me. Dolts."

don't try and change the subject...

"Dolts"??? - good one

vegas crash watcher said...

This deflationary spiral is just starting. It will take out the speculators first, then the Joe Six Packs who foolishly support the corrupt governments. All the while they pay taxes to their masters, even when their real estate and stock market assets shrink.

Hpy Babyboomer in Glndale AZ said...

"This 23 year old did something. He tried, he failed. At least he went out there and took a chance."

I have to agree.

Although he missed the market, what if he had been successful?

I played that same game, however I was lucky enough to get in earlier and get out before the market went sour prior to Aug 2005 in Phoenix.

Subprime loans and IO loans worked well for me as long as the market had big gains.

Isn't making money by manipulating the opportunity at hand, what it is all about?

I know quite a few people who profited exactly the same way. Are they demons or are they savy?


Its like the illegal problem. You can hire these guys at the Home Depot parking lot and do your home project on the cheap or you can hire a contractor who will hire these guys but put the money in his pocket instead of yours.

People will do what it takes to leverage their dollars. Good for them.

You pussies all think this guy is a loser, but if you don't take a chance, you don't have a chance.

Anonymous said...

Keep working the 5% CD. Keep renting and paying my mortgage for me. Dolts.

hehe... You are going to have to pay your own mortgage.

Funny how the underwater trolls keeping popping their head out of the sewage.

Shakster the dickhead said...

Anonymous said...
This 23 year old did something. He tried, he failed. At least he went out there and took a chance. What did you dickheads do the past 2 years? Oh you blogged. WOW! How exciting.
------------------------------------Respectfully-That is a very good point.
So with that being said,We should all take our risks,but be more aware before jumping into temptation.HPrs,this anon deserves credit.Get a name though.

devestment said...


Anonymous said...
hey dumbfucks what was that about stocks crashing beacuse of higher bond yields?

Keep working the 5% CD. Keep renting and paying my mortgage for me. Dolts.


Now, now, is that the way to show your appreciation? I detect some anger in your statement. And by the way, you are welcome. :)

Anonymous said...

"You pussies all think this guy is a loser, but if you don't take a chance, you don't have a chance."

NO. There is a big difference between a man who studies the market, takes an educated risk and bites off the right amount to chew. This guy is just many of the 'bandwagoner' assholes that got in at the tailend of the game because the shoeshine boy said they were not making anymore land in butt-fuck Tombstone Arizona. Before 04' I guarantee this fuktard was delivering pizza or waiting tables at the local Dennys in Vegas. He saw an ad in the local Pennysaver saying 'You too can be a Banker!' and signed up. BIG DIFFERENCE between the guy who went out got a college degree in finance, invested his money in other areas and then went for real estate for the long run. This guy is just an ASSHOLE that deserves to get burned. FUCK HIM.

Anonymous said...

Gosh, if the illiquid (and hardly transparent) real estate market could turn on a dime and self correct without hitting the wall at full throttle I guess I WOULD have done something more proactive!?

Why in God's creation would anyone (age aside) want to swim in this urine saturated pool with players like this I have NO IDEA!

And yes, I wish I could go to Canada, Peru or wherever and after a year on the job (why... selling home loans of course!) borrow more money than any man could ever hope to pay back! Either way, I'm skipping town!

As much fun as these @ssclowns might be at a party they still pale when compared to even greater fools like former used car salesman turned mortgage broker Daniel Sadek and his cinematic classic "Redline"! Now THERE's a player!

DinOR

Anonymous said...

The point is that this guy engaged in basically "riskless" investment. There was no way he had the income to support these loans!? IIRC this guy had NO business plan and as someone else pointed out, couldn't even locate many of the homes that he actually "purchased".

It was all just pure speculation. Nothing more. If it panned out well he likely would have claimed as many homes as possible as his "primary residence". If it DIDN'T pan out... well he never really had any skin in the game anyway! Sorry guys but I don't see any thing "proactive" or positive here at all.

Uh... put it all on... (coin toss) BLACK!

DinOR

Anonymous said...

oh so many winners here laughing at the "loser". if winner is defined as renting a shithole apartment while blogging 24 hrs a day wearing tin foil hats, yes you are all very big winners.

congrats to each and everyone one of you.

Joe Logic said...

This 23 year old did something. He tried, he failed. At least he went out there and took a chance. What did you dickheads do the past 2 years?

Keep working the 5% CD. Keep renting and paying my mortgage for me. Dolts.

Good question. I offloaded my properties to halfwits like you and cashed out BIG while RE was still peaking. Then I moved money into index ETFs, bonds, China when all you suckers were saying RE was the only way to go. All the while you were subsidizing my housing costs by covering the remaining 60% of your mortgage on this rental. Oh geez guess what, I just took a giant shit and now the toilet's clogged. Now come over and f*ckin fix it beyotch. Get in there and clean it out good.

Anonymous said...

"This 23 year old did something. He tried, he failed. At least he went out there and took a chance. What did you dickheads do the past 2 years? Oh you blogged. WOW! How exciting."

Actually, I worked 8 to 5, lived modestly (did a lot of fishing and motorcycling) and saved toward a down payment while renting a cheap but comfortable apartment in a relatively safe area. What did you do?

Smug Bastard

Anonymous said...

Hey Zareh Tahmassebian,

YES, I would like fries with that burger.

BWAHAHAHA!!!!

Anonymous said...

It is very easy and does not require much intellect to gamble with other people's money. That is exactly what this fellow did and as far as I can see, these types of folk (him, his investors, those who made the loans to him, etc.) who are willing to take those types of risks because of their sense of greed or entitlement deserve what they get in the end if things turn sour.

robert said...

Anonymous said...
“This 23 year old did something. He tried, he failed. At least he went out there and took a chance. What did you dickheads do the past 2 years? Oh you blogged. WOW! How exciting.”

Anon, if you think this is “doing something”, you’ve got a long road ahead of you. This type of “doing something” is simply following herd mentality and in this case, the lemming is following other twenty somethings to foreclosure.

Yes, at times the route of the tortoise is not very exciting but, sometimes the best action is lack thereof.

P.S. I’ve got a Tickle-Me-Elmo that I’ll sell ya for 500 bucks.

Suckitgoodbagholder said...

"I just took a giant shit and now the toilet's clogged. Now come over and f*ckin fix it beyotch. Get in there and clean it out good."

LMFAO!!! HAHAHAHAHAHAHA. If this isnt a virtual bitchslap, i dont know what is. I love it how these douchebags assume everyone on HP is a renter because we have to. Dumb ass MOFO!

robert said...

Anonymous said...
“Keep working the 5% CD. Keep renting and paying my mortgage for me. Dolts.”

Looks like another wanna be landlord that just had an ARM re-set.

Anonymous said...

I worked with a guy who did this on a smaller scale. He owned 3 homes at the height of his empire as he liked to call it, all in Phoenix and all rented out. Difference is this dude was smart and saw what was coming. He sold all of them in late 2005 and early 2006 and I'm sure made a ton.

Sixpercenter said...

Why are these idiots always of middle eastern descent. I don't understand. I know two middleasterners. Both obesessed with real estate.

Maybe real estate is to middleasterners as convenience stores are to Indians and dry cleaners are to Koreans??

rcochran said...

This 23 year old did something. He tried, he failed. At least he went out there and took a chance. What did you dickheads do the past 2 years? Oh you blogged. WOW! How exciting.

_________

Well...I guess you need to sell some real estate REAL BAD, eh, tiger?

At least you're out "doing something".

HA!

rcochran said...

By the way...I enjoy HP, and I am NOT A RENTER.

I own a home, conventional mortgage...DID rent for 15 months, and it was the right thing to do.

I think renters are smart to be renting, especially if they're saving the massive amounts of money they would otherwise be spending as homeowners.

Get Real said...

"You pussies all think this guy is a loser, but if you don't take a chance, you don't have a chance."

Making money from other people's money is the biggest pansy ass way any man can make a living. The joke of it all is that these guys have been elevated and revered while they should be reviled for the male whores that they are. They take enormous capital out of the system and produce N-O-T-H-I-N-G and protect N-0-T-H-I-N-G.

Erstwhile Anon said...

Going into business is risky. About 75% of new small businesses fail within a year or so. The ones who do not fail are risk minimizers.

Yelling at people "why don't you get out there and take some risk, wimp!" rather emphasizes your ignorance about how the world (the real world of grown-ups) works, and how to succeed in it.

Because someone spends a few moments blogging does not mean they have no ambition or life outside of the web, for crying out loud.

kitchenstove said...

Anonymous 12:06 PM said...

This 23 year old did something.
- Yeah he helped inflate housing prices and so helped cause the Housing Bust.

He tried, he failed.
- You noticed that too?

At least he went out there and took a chance.
- "Out there" doesn't even begin to decribe where this fellow went.

What did you dickheads do the past 2 years?
- Saved money perhaps? Lived within our means maybe? He's the one with a hole in his head, you should call him "dickhead".

Oh you blogged. WOW! How exciting.
- You wear a yellow blazer to work don't you?

Anonymous said...

I love it how these douchebags assume everyone on HP is a renter because we have to. Dumb ass MOFO!

---------------------

Kinda like how every HPers assumes every homeowner is about to reset on an ARM or is days away from foreclosure? Yeah I love it too.

HauspocalypseNow said...

i would like to thank fortune magazine for running that story in 2005.

http://www.armeniapedia.org/index.php?title=Zareh_Tahmassebian

its one reason i SOLD EVERTHING and am cash sitting.

kids like him get creamed every bubble.

its the same story 4evar

Salt Lake Mortgage Guy said...

Here's the inside scoop on this guy Zareh. Foreclosures are the least of his problems.

buy low not high said...

The winner is renting the house from the loser at 50% PITI

The loser will burn through his savings and eventually face foreclosure and be out of the game when RE bottoms.

Anonymous said...

Anonymous said...

This 23 year old did something. He tried, he failed. At least he went out there and took a chance. What did you dickheads do the past 2 years? Oh you blogged. WOW! How exciting.

June 11, 2007 12:06 PM
-------------
What the hell did he do a--hole? What productive task did he perform by make a couple of million disappear?? Feed a bunch of parasitic realtwhores, banks & MBS investors? How about getting off his a$$ and doing an honest days work for an honest days pay and actually doing something productive for society instead of going for the quick something for nothing buck that benefits no one but himself and harms everyone in the form of defaulted loans whose costs will be spread across the rest of us and jacking up the cost of housing for hard working people.

belchorama said...

Keep working the 5% CD. Keep renting and paying my mortgage for me. Dolts.

I'll keep paying about half of your mortgage payment (a third after you're taxed on my rent, but who's keeping track?). You keep paying the other half while your place depreciates at 10% per year. Since you're leveraged about 5x in "your" place, you'll watch your entire equity vanish over the next two years, and once it's vanished you'll watch it vanish some more, even though it's not even there anymore. I'm doing better than 5% CDs, but 5% will be looking much better than your -50% by about this time next year. Meanwhile I will be piling up money since you are subsidizing my existence (bitch). Maybe I will use it to buy a place outright in a few years at about half of the current dumb-ass sticker price, or maybe I'll just keep letting dumb-asses like yourself take care of half of the monthly payment for me. Boy I sure am a dolt.

That's an excellent hat you're wearing. It looks remarkably like your own ass.

Alarm said...

"Anonymous said...
This 23 year old did something. He tried, he failed. At least he went out there and took a chance. What did you dickheads do the past 2 years? Oh you blogged. WOW! How exciting."

I would imagine they were adding value in their respective careers and earning an income the past two years.