22603 Clarendon St., Woodland Hills 913674 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....
Conclusions:
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....
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