Monday, March 31, 2008

REO for sale by bank that doesn't want to sell....

5537 Sylvia AVE
Tarzana, CA 91356
Sales History:
Sold old shack Apr 10, 2003 $370,000
Sold after building new house Jun 01, 2005 $1,260,000
Found (another) sucker to pay Mar 15, 2006 $1,520,000
Foreclosed Jul 06, 2007 $1,074,207
Now asking $979,900 (after initially asking Jan 05, 2008 $1,153,900

This one is awesome. I would not spend your reading time going through the process of the bank realizing he needs to slash the asking price, but would rather show you one picture from the listing.
Look at the pool and the water condition inside, is that a way to sell a house??? If you can't clean the pool and maintain it, please don't take a picture of it. Also poor neighbors with mosquitoes...
One picture is worth a 1000 words....

Flipper Bought from Foreclosure & Heading to Foreclosure...

22603 Clarendon St., Woodland Hills 91367
4 bd, 3.5 ba, 2501 sf, 6750 sf lot
So this house is located in the epicenter of the valley's flipper city.
I don't know if this is funny or stupid. It does show us what catching a falling knife is.
Also, this can help to see how is it to buy at REDC auction together with another 3000 (un-knowledgeable or over-excited) buyers.

On Oct 28th 2007 - It sold for $640K plus 5% REDC commission to total $672,000
This house was listed for $759,900 - $679,900 for 125 days May thru Sept. 2007 and obviously did not draw any offers.
Here is the sales history:
Sold Jan 11, 1989 $333,000
Sold Nov 23, 1998 $299,000
Sold Oct 03, 2001 $320,000
Sold Jul 15, 2005 $820,000
Sold Mar 21, 2006 $980,000
Foreclosed Mar 27, 2007 $744,750
Sold Nov 27, 2007 $672,000

I decided to show the 1989 sales price since i think most of you know this was a sale close to the 90s housing boom. If we consider even high 4% inflation of 19 years since then. The price should have been about $701,000. Since it sold in end of 2007 for less than that. It proves that housing is terrible investment tool. It barely tracked inflation for 19 years!!! But not more than that...Also today is not the bottom either...

The interesting part here that the buyer which is obviously a flipper, paid $672,000 that is $308,000 (or 31%) less than last price which might sound great...(btw who was the fool to pay $980,000... I'll get to that later)
So, this flipper turns around, paints the house and cleans/changes the carpets. Then he lists it for sale for......$900,000. WOW. Today after about 3 months of no bids, he placed a FOR RENT sign...
The zillow zestimate(tm) is $844,000
Today its street price is $500,000-540,000 (check out next block 22620 Clarendon ST listing...)
Actual value per lakerland estimation $320,000 (roughly 2001 price)

Now, let's get back to the $980,000 sales price. As you can see using the sales history, the house was foreclosed exactly 12 month after being purchased or refinanced. For those who know how foreclosure work in CA, will know that 12 months is about the time it takes from the moment the borrower stops paying. That is 3-5 months to get NOD, another 3-4 months to get NTS, and another 1-3 months to become sold at court step auction and become REO.
That means this borrower never made a single payment!!!! If you look at public records, it is clear the this property was sold in 2005 for $820,000. The owners, after 6 months, figured out that they overpaid, and would probably can't afford the house (which was used as an elderly rehabilitation center). So they decided to use the lax, no doc, maybe option ARM country wide loan, and cash refinanced it by pulling $160,000 cash. Countrywide has never since a payment from them since....

1) Fraud, lax lending, crazy loan - foreclosure
2) Greed by new flipper that thought he could paint and flip but ops...he caught a falling knife.
Now with mortgage payment of about $3000, he can't find a renter to pay it. He also put 20% of his cash for down payment.....bye bye $134,000....

Saturday, March 29, 2008

Buying at Top of Market or Just Plain Flipper Stupidity

4656 Willens AVE Woodland Hills, CA 91364

It is unclear whether this seller has bought to flip this house or to actually live there but did that in the wrong time.
In any case, he simply over paid, and within 6-8 months got himself in upside down position...
Sales History:
Jun 29, 2007 $755,000

After about 5 month, he lists for sale and plans for some $100,000 gross profit:
Asking Dec 24, 2007 $865,000
Price decrease Jan 12, 2008 $799,000
Zillow zestimate(tm) $827,500

Still no takers...


5869 Eilat PL Woodland Hills, CA 91367
This one seems to be a loan owner that bought the wrong place at the wrong time...
It is simply hard to believe it was a flipper with expectations that this property would go to $2M or more...
Sales History:
Sold Dec 23, 1996 $335,000
Sold Sep 08, 2006 $1,246,000 ( I thought this was the peak year...)
Sold Jul 11, 2007 $1,499,000 (wow....)

Listed for sale after six months of "loan" ownership.
Asking: Feb 14, 2008 $1,400,000 (loss of $100,000 or 6.7% but still asking above 2006 price)
Reduced Mar 26, 2008 $1,100,000 (loss of $400,000 or 27% and gets closer to reality...)

Still, this property is probably worth $900,000 today considering a fresh comp (larger&newer house) but has actual value of about $550,000.

A new contender for flipper of the week

Check out this flipper...acting quick to fix, and list on MLS. I guess he knows where prices are going...and how fast...
19953 HAYNES Woodland Hills, CA 91367

Prior Sales History:
Sold May 25, 2001 $285,000
Sold Mar 31, 2006 $750,000
Foreclosed Jul 18, 2007 $557,750
Jan 25, 2008 $500,000

Zillow zestimate(C): $579,500

Asking Price: $725,000

Now, let me get this straight. The guy buys this shack from the bank for $500,000. The house was completely destroyed and was used as whore house for couple of months...
The flipper claims he spent $100,000 in remodeling...So after less than 60 days, he lists for sale and looking to make $225,000 gross profit, that is 45%...
Even if we take 2-3% commission to buyer's agent and the claimed $100,000 (i wonder if he can prove it) Still very nice "theoretical" profit.
Problem is that this is still a shack. Couple of travertine (made in china) tiles in the kitchen, and a fresh coat of paint does not justify that asking price.
We will track and see what happens to this smart flipper.
My guess, he will be lucky to get his $500,000 back.

Tuesday, March 25, 2008

Case Shiller index for LA updated to Jan 08

Pay attention to the peak and the shape. Compare to the last boom-bust of 1990's. The current decline is much steeper. Did anybody say slippery slope...

Saturday, March 22, 2008

West part of valley sells for early 2004 levels

Here is a property in a nice part of Woodland Hills.
24840 EILAT ST, 91367

May 22, 1998 $510,000
May 21, 2004 $1,075,000
Sep 21, 2006 $1,525,000
Feb 29, 2008 $980,000

btw: Zillow Zestiamate: $1,300,000 (about 25% off)
If you know the area, zillow is "estimations" are about 20% more than the property is/will sell for.

As you you can see, the house was sold for LESS than its price in May 2004.
If you divide the "appreciation" from 1998 to 2004, $980,000 is just about price somewhere in 2003.

Tuesday, March 18, 2008

Flipper of the week Update...

Our Joe sixpacks Flipper has just reduced his asking price to $675,000.
Now he is "just" $100,000 above the price he paid 2 months ago for this "lovely" home.
Of course take away the change money he spent at home depot buying paint and new piece of carpet. Also 5% RE commission. Will keep you updated.

Friday, March 14, 2008

Flipper of the week

Welcome back, as i promised, I found an interesting listing that's both entertaining but mainly belongs to my new category of "Flipper of the Day"

5806 Laramie Ave Woodland Hills CA 91367

Sold Jun 20, 1995 $219,000
Sold Dec 18, 2003 $505,000
Sold Aug 22, 2006 $900,000
Foreclosed Aug 10, 2007 $639,435
Sold Jan 04, 2008 $575,000

Asking Price History:
Feb 07, 2008 $752,950
Feb 14, 2008 $749,500
Mar 04, 2008 $729,500
UPDATE: Mar 17, 2008 $675,000

Zillow zestimate tm : $732,500

Why it belongs to Flipper of the Day?
Joe "six pack" Flipper bought in January for $575,000, might have changed the carpet, painted the walls, and immediately listed for sale for $752,950. My bet is that it cost him $950 bucks at homedepot to buy the new piece of carpet and couple buckets of paint....
Joe "six pack" Flipper is trying to make $177,950 (or 30% profit)
Well, Joe, right now you are down to $154,500. Take away agents commission of 5%, that nets you $118,025. Not to bad...for paper money.
Considering this area is selling at about 2004 price levels, that means the house can sell for about $500,000-520,000.
If you want to know its actual value (smart buyer), add about 3-4% of inflation to the 1995 figure: You'll get $322,000-395,000

Smart Casher:
Look at Aug 22, 2006 sale, that seller sold for $900,000 bought for $505,000 in 2003. He made about $400,000 (or 80% profit) in less than 3 years!

This Week's Best Price Crash in the valley

Welcome to LA House Price Crash,
We are all aware of the housing/credit meltdown both nationally, but mainly here in So Cal.
Every week, I will try to bring selected homes that would be of interest to you.
While searching the available houses in the market, we could see many sellers that are still living in a dream. We all hear about those "poor" homeowners that are losing their houses and getting thrown to the streets...while some homeowners indeed suffer major losses both financial and emotional, other home owners either by luck or wisdom managed to sell in time, and cash enormous amount of money. Nobody today hardly mentions that, so i will try to pick up the task and bring those "winners" for your recognition!
I'm spending major time in particularly the west San Fernando valley so most of the properties would be local to that area.
Since i find this to be very informative to both today's buyers AND sellers, stay tuned and enjoy the show.
Additionally, those that are not potential buyers or sellers could still benefit as it provides a great amount of entertainment...if you know what i mean.

03/14/2008 House of the day:
23747 Canzonet St.
Woodland Hills, CA 91367
According to public records, this nice property was purchased in
Mar 21, 2007 for $1,250,000 and asking price today is $900,000. That is a $350,000 below last year purchase price...or 28% reduction if you wish.
What do you think it will sell for?
Did the seller overpaid just less than 12 months ago...
Sold Sep 02, 2005 $901,000
Sold Mar 21, 2007 $1,250,000

Zillow zestimate $1,105,000
Asking price:
Feb 07, 2008 $985,000
Mar 07, 2008 $925,000
Mar 14, 2008 $900,000

Smart Casher made $349,000 (or 39%) in about 18 months!