Customer Reviews

Untapped Riches: Never Pay Off Your Mortgage -- and Other Surprising Secrets for Building Wealth

5 star:		(3)
4 star:		(0)
3 star:		(4)
2 star:		(3)
1 star:		(3)

 

 

This type of thinking is what has led us to the credit crisis, real-estate implosion and record foreclosures. It works great when real-estate goes up, but if the value goes down, the mortgage is worth more than the house and the owner is underwater. This causes people to mail in the keys to the bank which add to the real estate glut.

This book is the road to financial ruin and a little research will tell you that this is what happened to the author. Look forward the the sequel: My life as a homeless person: How to buy the best cardboard boxes on the street with no money down.

Seriously, use fixed rate, conforming loans and do it the old-fashioned way. You will come out ahead.

Smart loans, option ARMs, Pick A Payment what every you want to call them are blunt instruments used by the not so sophisticated buyer. While the concept presented in Untapped Riches does have some validaty a similar and more powerful concept is presented in a much more comprehensive and meaningful way in Douglas Andrew's Missed Fortune. Untapped Riches is a good place to start but will leave most with too little knowlege to do anything meaningful.

I was really looking forward to reading this book but I have to say, it's been a bit of a let-down. The basic premise of the book is to take out a "New Smart Loan" aka an option-arm, and make the minimum payment (negative amortization). Then take the rest of the money you would have spent on a regular mortgage payment, and invest it into an account that earns compound interest. That's a valid idea, and I'm sure it works if you have enough discipline to follow through with it and not spend the money elsewhere, but that's pretty much all they talk about. I keep looking for some other strategies to imply, but they aren't there. What's frustrating is that they keep dragging this one concept on and on, writing new chapters that all say the same thing, and constantly fall back on their "New Smart Loan." I honestly wouldn't recommend this book.

Truthfully, many people out there have been doing this sort of thing for years. The authors seem to do alot to stretch a pretty simple concept into a full fledged book. In this case - I say read it, understand it and put it in your toolbox just in case you need it. Understandably, some will not want to take such risks. Buy this one used!

Untapped Riches by Anthony Cutaia attemps to educate the reader and make aware that a stigma exists within the banking industry that is passed on to mortgage borrowers that the best way to acculumlate wealth is to remain debt free and to pay off mortgage as soon as possible.

While the book's information regarding 1031 exchanges can be found in any real estate 101 book found in any book store or department store, this is the first book among MANNNNY that i have read which brings to light the possible tax savings one can bring about by procuring a cost segregation study. While informative, this specific information seems more tailored to builders or those who own multi family or commercial building worth millions at a minimum rather than the average "weekend real estate investor".

The book's main argument is that instead of getting fixed rate loans at a higher apr, one should keep monthly payments at an absolute minimum by way of new "Smart loans", interest-only loans or short term ARM's that allow the borrower to make payments as low as 1% even if it means risking negative amortization or ABSOULELY 0% equity after many years of payments. The author's idea is that the savings in this lowered monthly payment when placed in an alternate investment vehicle such as CD's or bonds, When compounded, generate more income rather than being "dead moneY" or equity when used as payments to acelerate a principle balance. The book argues that being that mortgages are set up where most of the payment is applied to interest within the first 15 years, and that statistically speaking, most people sell or refinance within 7-10 years it is better to leave the cash out of the banks hands and "let your money work for you"; Using historic real estate appreciation rates in several US cities, the book recommends repeatedly withdrawing more equity in the form of refinancing and then using that money to buy more real estate.

The book cites areas such as West Palm Beach FLorida and uses appreciation percentages as high as 8% per year in many of it's examples. I'm sure that this book was written prior to the current economic recession we are in as statistically speaking, odds are you will not be in an area where real estate is appreciating at even at 1% nor will you find a place where cd's are generating a 5% R.O.I.

Overall the book is an interesting read for anyone who is interested in finding alterative ways to structure mortgages however in the current state of economy, how many banks are actaully offering these "SMART LOANS" or NEGATIVE Amortization loans? Will a bank really cash out a borrower and allow the loan to NEGATIVE AMORTIZE where the loan exceeds the value of the property? many may find the techniques used in this book as over extending and rather risky. While I like how the book promotes the idea of less equity vs personal investment and the power of compounding in the current state of economy and real estate recession, a lot of the ideas i do not believe are applicable. To the average weekend real estate investor with limited experience, using these techniques = foreclosure. To the seasoned real estate investor with a good understanding of leverage the idea's here "could in theory work." ... COULD...

Anthony and Susan Cutaia filed bankrupt in South Florida, lost five homes due to foreclosure and ran hundreds of investors into the ground. If you want this book, I will also sell you Bernie Madoff's book on How to Make it in America!

Hundreds of investors have sued them and they have lost everything they own except, ironically, a radio call in show to give investment advice. I suppose since Madoff was a little busy at Club Fed, they hired the next best thing, the Cutaias.

Seriously this book should have really been called, "Never Pay anbody for Anything," with a foreword by Charles Ponzi.

Looking at interest-only loans today. I would like for you to decide about this book. Also if you do thing ethically and try to not to stay in the grey areas, you will prosper through honesty. It isn't always about being wealthy.

Excerpt on Pg 66 on Interest-Only Mortgages:

"One concern that people have about interest-only mortgages is the fear that they will be subject to much higher interest rates after the initial five- to ten-year interest-only period ends. But with interest rates at historic lows, many variable-rate interest only loans are capped at 12% or less over the span of the mortgage. That is a rate that many Americans need not fret about."

However Chapter 8 goes more in to depth about the risk associated with this type of mortgage. It is unusal that the author make you aware of this program's risk but seems to want you to try them.... "It's not the responsibility of the government--of Big Brother--to tell you how to manage your money." (2007 pg. 79)

I couldn't recommend this book except to show how Americans thought during 2006-2007 about our "Titanic-like", ever-increasing, foolproof economy.

The neg amort loans that were pitched in the book have backfired. Banks will no longer do them, they probably will be banned by new laws. Anywy the author went bust and shut down his offices. Right now investigated by the FBI and IRS. Those who saw big problems here were right.

It was informative and eye-opening. I have trouble with the idea that you should keep a mortgage after retirement if on a fixed income. If you have a huge 401k or other retirement planned where you will be taxed high and heavily, then may make sense.

These two mortgage brokers really deliver the goods with their approach to investing, but at what cost? Sure, don't pay your mortgage, and with the money you save you can "purchase" more property, and don't pay those mortgages either--just keep investing. In the end you will have amassed a fortune and you won't have paid (much) for any of it, because if you are using so-called smart loans, you won't be paying any principal (at least for as long as you can get away with it). Just like gambling, one can become addicted to this type of speculation posing as wealth accumulation.

If "greed is good" is your motto then this book's for you. No pesky values like integrity mentioned here. According to these authors owning your own home outright is a 20th century concept whose time has passed--financing for as long as possible (like forever) is the new black.

Though the writing style of Susan and Anthony Cutaia is less than collegiate, they do get their misbegotten point across.