Watch this flipper try to sneak out of the falling housing market
1334 Oliver AveSan Diego, Ca. 92109
3 bdrm, 2 bath, 1245 sqft house, 3100 sqft lot
Year Built: 1950
Price per sqft: $582
DOM: 35
1 car garage
Purchase Price (05/05): $725,000
Asking Price: $725,000
Here's another flipper who just listed his house a little over a month ago. He's trying to jump ship without too much in losses, but, that's the devil about buying in a super inflated market. In a balanced market (Rent close to mortgage), you could sell a place for what you paid for it and only be out commissions, maintainence, and closing fees. In this market, you just paid that huge premium of 2 to 3x rent for the pride of ownership. Honestly, this guy is going to have to lower his price anyway. It's a good location, but way overpriced.
| Purchase Price | $725,000.00 | |
| Sale Price | $725,000.00 | |
| Association Dues | $0.00 | |
| Holding Period(mo) | 22 | |
| Mortgage Paid | $86,395.83 | (6.5% interest only) |
| Closing Costs | $4,000.00 | |
| Property Tax | $16,614.58 | |
| Estimated Monthly Rent | $2,100.00 | |
| Estimated Monthly Loss | $1,482.71 | (if rented) |
| Estimated Monthly Tax Savings | $1,099.58 | (using 28% tax rate) |
| Sales Commission | $43,500.00 | |
| Total Loss | $80,119.58 |
Here's a second property just because I'm so bad about updating lately.
I've posted this one before, but then the owner pulled the listing (I believe the property was pending and the deal fell through, but I have no way to tell right now).
1370 Missouri St
San Diego, Ca. 92109
2bdrm, 2bath, 1032 sqft house, 6300 sqft lot
Year Built: 1942
Price per sqft: $785
DOM: 2 (but it's misleading, this has been for sale for much of last year)
2 Car Garage
Purchase Price (10/05): $834,257
Asking Price: $810,000
| Purchase Price | $834,257.00 | |
| Sale Price | $810,000.00 | |
| Association Dues | $0.00 | |
| Holding Period(mo) | 17 | |
| Mortgage Paid | $76,821.17 | (6.5% interest only) |
| Closing Costs | $4,000.00 | |
| Property Tax | $14,773.30 | |
| Estimated Monthly Rent | $1,800.00 | |
| Estimated Monthly Loss | $2,322.62 | (if rented) |
| Estimated Monthly Tax Savings | $1,265.29 | (using 28% tax rate) |
| Sales Commission | $48,600.00 | |
| Total Loss | $116,341.54 |
I promise to get better about updating this!
posted by Sven at
12:37 PM
25 Comments:
This is amazing that these people think they can get this price for these homes. I wouldn't even look at them if they were $250k. I bet you have a real easy time over the next few months to post these as the numbers will continue to soar and the losses continue to increase.
By
Anonymous, at 3:44 PM
I posted about the Missouri home a while ago because I had gone by it and the flier outside had an asking price in the mid to high 700's I believe. I could be wrong on the number, but either way they are going to be taking a nice loss here.
I have recently moved back up to Santa Monica for a new job and I can't even begin to tell you how obscene prices are in Los Angeles...
Interestingly enough, downtown LA (especially around the Staples Center) is filled with cranes building new condos and hotels...looks a lot like San Diego a few years ago.
Anyways, its getting more apparent that things are going to be coming down hard pretty soon (especially San Diego as it has been leading the cycle all the way through). Its a great time to be young and renting.
-Craig
By
Anonymous, at 6:32 PM
Hey Anonymous #1,
You're kidding yourself if you think these homes aren't worth $250k even at the very bottom of the upcoming correction; where are you living, Iowa?
I live about five houses down from the one on Oliver Ave, and if I could get that for $500k I'd buy it tomorrow and sleep quite well through the coming correction. I'll agree that San Diego is overpriced, but it will always be more expensive than other parts of the country for a very simple reason, it's nicer.
By
Oliver Ave Resident, at 10:33 PM
Curious as to why you missed the house on Aster that was bought 2/06 for $730K and fixed/flipped for $1.12M last week? Or the one on PB Drive purchased for $800K in 1/05 and fixed/flipped for $1.075M 2 weeks ago? or the one on Riveria bought in 10/04 for $715K which closed 2 weeks ago for $910K?
By
Anonymous, at 10:29 PM
Now I see
"There are a lot of listings in this area, but I plan to focus on listings where the seller is taking a loss. Accuracy is not guaranteed, but I will do the best I can to make sure that I don't post misinformation."
One question? Isnt posting one side of the story misinformation?
By
Anonymous, at 10:30 PM
Congratulations Sven you now have a REIC Troll of your very own!
My advice, dye it's hair pink. Dress it in a leopard print "Tarzan" skirt then toss it in a cardboard box and donate it to Goodwill.
Oh and if you get a chance ask it for some holding costs and expenses for fixing up those fine Flips.
By
bub, at 9:19 AM
Anon 9:29 PM - Posting one side of the story is not misinformation when this is the clear and stated intent of this blog.
Why don't you start your own blog and list all the successful flips you have discovered - and while you are at it, list the full address and do some research as far as what was spent to get the home to sell.
Subtracting only the original purchase price from the sales price to get the supposed profit from the flip is leaving out most of the necessary data.
Do your homework and add the amounts spent on upgrades, holding costs, sales commissions, HOA fees, homeowner's insurance, home repairs, etc... in other words, include all the info that Sven does.
If you can't do that, go back to your troll hole.
BTW, Sven, YOU do a marvelous job of keeping us up-to-date. Thanks!!
By
Anonymous, at 4:03 PM
I walked by the Missouri house today and the for sale sign was gone. However, there were two lock boxes (one on the door and one on the railing) so I don't know what is going on with this place.
Also, the 4-plex on the end of the 1500 block of Missouri which you have featured before on this blog has a for sale sign in front of it. I was interested to see that because it was previously listed as a short sale in a distressed situation yet there was no sign out front.
And in response to the poster who talked about examples of people making money on flips...I think it is fine to show examples of people making money flipping but you have got to take into account all the extra costs that the other poster here mentioned. Also, I think it is pretty early right now to say that this cycle is anywhere near complete...thus, there may be some people who just don't quite understand that it is a horrible time to be buying. Also, the subprime and overall tightening in the mortgage markets is just getting started. Also, these purchases could very well be fraud (as we have seen many cases of this documented on the Bubble Markets Inventory Tracking website).
This is not to say that there may be a few examples of people still making some legit profit at this point...however I think its a pretty tough market and we are only just beginning. Keep up the good work Sven
By
Anonymous, at 12:25 PM
you have to see the new listing on the 4800 Block of Morrell. Its just two 3 bedrooms one on top of another, for get this, $800k! I was like, that includes BOTH top and bottom right? NOPE. Oh man we were laughing our asses off.
We stopped by an open house on the way to Crown Point Park, it was on the way and our little dog was tired. Nice young couple inside, they wanted $560,000 for a 2 bd room, and it was a terrible building IMHO. I told them, sorry, I couldn't even qualify for a loan for that much... they will be hear a lot of that, no first time home buyers are going to be qualified for that kind of money anymore.
By
Anonymous, at 1:25 AM
810 is too much for that property. So the average worker in sd is expected to pay close to $5k/month mortgate plus taxes, for that?
By
Anonymous, at 9:33 PM
I didnt realize the average worker in SD was supposed to live in a new home a couple blocks from the water. i thought those guys ended up in places like Clairemont, Santee etc.
By
Anonymous, at 12:28 AM
Santee is where uneducated, meth addicts, like yourself live.
By
Anonymous, at 12:10 PM
anon 11:28
You act like a 2 bedroom 60 year old tiny fix-er-upper house with no garage in Santee is affordable. (I know someone who bought one in El Cajon for about $450 recently, and she was convinced it was a "good deal")
Following the 33% principle, someone should be making about 9k a month in order to buy one of those houses.
No, I think a middle class couple in the early 30's making a combined income of 130k+ should be able to afford a 3 bedroom PB house. That's just not the fact of life right now unless they want to get a toxic mortgage or not eat.
Give it a couple of years.
By
Sven, at 11:00 PM
Hey Numbnutz!
"No, I think a middle class couple in the early 30's making a combined income of 130k+ should be able to afford a 3 bedroom PB house."
$130K does NOT represent the average worker!
By
Anonymous, at 12:06 AM
130k does probably represent the average educated couple. It doesn't represent the average uneducated worker in SD who works a service job. SD is a service economy.
By
Anonymous, at 9:56 AM
Zillow details on Missouri Home
Well, according to Zillow, this house sold on 3/2/07 for $677,817 down from the purchase price of $795k on 10/20/05. That's a nice $117k LOSS (after carrying costs!!!).
I think a Realtor bought it as it has been quickly "flipped" and is already for sale again at $725k. Someone bailed out the first guy (for a huge loss) and is trying to pick up a quick $47k.
I live (rent) right up the street. I think I might walk down and put a nice juicy $495k offer on his desk just to piss him off!
By
sdREbear, at 2:18 PM
I went inside 1370 Missouri. Half the house is torn apart and unfinished. The ceiling is open, the exterior stucco around some of the windows is removed and exposing the framing, the kitchen-I don't know what the owner was thinking. This place needs some serious $$$. The asking price is so high-the next owner is going to have to sink at least $100,000 to finish the home. The last asking price on MLS was $725,000. Now it's in foreclosure and listed at $810,000. Good Luck Bank.
By
Anonymous, at 10:35 PM
I agree that I would buy that home for 250k in a heartbeat. San Diego is a very nice place with naked flesh to stare at on a regular basis.
I dont know if there any jobs left there, or if its overrun with bangers, however. I've got a fat bank account, and I could do 350k, and my gf and mom would wonder about me moving to SD, but that house is definitely worth at least 350k. Its prob worth 500k, but that all depends how far and hard hard the entire economy falls, so dont forget that, knife-catchers.
Housing should be where it was at in 1995. Wages have not increased that much since then.
By
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