Friday, May 22nd, 2009 at 3:41 PM
Investor Report – $130,000s
Back in January we noticed this house on Parker that was a Downey REO – back in the day when they had their own brokerage.
This was the one photo in the listing:
It was listed for $169,000, and the day after this video ran about it (link to previous youtube video):
http://www.youtube.com/watch?v=HoAU74O1Ut0
Downey cancelled their own listing and gave it to a local agent, who closed it for $134,000 all-cash in March, 2009.
For those of you who’d appreciate the before-and-after look on these cheapies, here is a new video of the house next door that just listed for $139,000, and has multiple offers on it:
At the end of this video the camera peeks over the fence to look at the backyard of the house at the top – and you’ll see quite a difference. It looks like they may have rented it out, and probably got $1,300 to $1,500/month without too much trouble. In April, almost two months after paying $134,000 cash, they refinanced with a loan for $131,000.
Posted on Friday, May 22nd, 2009 at 3:41 PM in Jim TV, Real Estate Investing | 20 Comments » | 
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I remember that house.Weren’t there some add ons without permits?Glad something is elling out there.There are sure a lot of wish prices out there still.
arizonadude | May 22nd, 2009 at 4:10 pmThat cute little guard dog means business!
JAP | May 22nd, 2009 at 4:19 pmClearly being here is not luxury living. Which make me wonder who is going to live there and consistently pay $1,400/month. I think the owner would find out that unless the unit is Section 8 approved received 12 months of $1,400 seems unlikely.
Do you have any insight on how consistently places like this are occupied?
LV Renter | May 22nd, 2009 at 4:21 pmAlso with the mold you point out, can you comment on how likely it is to rent this place and then subsequently get fined by the government for renting a place with dangerous living conditions. (I would think the tenants will report when they cannot come up with the rent)
LV Renter | May 22nd, 2009 at 4:24 pmShows how low society has sunk when the d@mn neighbors put the fence good side facing themselves!
Rob Dawg | May 22nd, 2009 at 4:43 pmSo, the new scam is to get some loan shark money or money from relatives and make a cash deal. Then refinance and pay all the money back.
Oh boy do things have a long way to go.
James/LAEF2 | May 22nd, 2009 at 11:13 pmI’ve been hearing that a lot of these “cash” deals are really loans from hard-money lenders and/or investment pools.
No, the bubble is not over yet.
CA renter | May 23rd, 2009 at 1:09 amWhen the Fed holds rates at zero, lenders (savers) will do anything to get some yield. Hard money lending is hot right now, from what I hear.
The Fed (and all of us) has learned absolutely nothing.
CA renter | May 23rd, 2009 at 1:11 amThe Fed (and all of us) has learned absolutely nothing.
Ever watched an addict needing a fix?
ArtEclectic | May 23rd, 2009 at 7:00 amAll that love put into this place says it was a rental. With a crack like that and that mold, it’s probably better to flatten the place and rebuild.
doug r | May 23rd, 2009 at 7:34 amSo do you figure settling or earthquake damage?
Michigan and Ohio these type of deals are $10,000.00
I would rather live in my car than this type stuff.
doughboy | May 23rd, 2009 at 8:45 amRob Dawg–At least it is a new fence–My thought is this–approach the neighbors beforehand–if they don’t want to contribute money or labor(at least some)then sure–put the good side of the fence towards your yard. They will still benefit and they can always put a finish side on thier side later–the hard work (posts, ect..) is already done. Just my method.
Local Boy | May 23rd, 2009 at 9:40 amRefi… I wonder how much work they did?
I am hearing that it is tough to get refi lending that acknowledges either improvements or below market purchase price (if there is such a thing). That is, the banks are not in the mood to lend 300k on something you just paid 240k for a couple months ago.
Others having experience on this?
Skeet | May 23rd, 2009 at 1:53 pm300k being total rehabbed appraised value.. not the loan amount.
Skeet | May 23rd, 2009 at 1:54 pmYou won’t get a 100% loan on a 300k appraised value – it will typically be 60-80% of the appraised value. So if you paid 240k and it appraises for 300k you can probably get 210k back out.
IRE | May 23rd, 2009 at 2:26 pmA “cash-out” re-fi by any sort of conventional lender would be tough, especially with such a short amount of time of ownership–What they might have done is had someone close to them file a Trust Deed against the property (or actually had a private “hard money” lender for the interim period) in hopes of re-fiing for “rate and term” once the property is seasoned–sketchy, but I have seen it done!
Local Boy | May 23rd, 2009 at 4:38 pmIf lenders are supposed to be tough WRT refis, why am I seeing successful flips?
Let’s say a specuflipper buys a house for $200K, gussies it up with $10K of “improvements” and relists for $300K. I’m seeing sales…why aren’t the new lenders questioning the sudden price increase? If I were the lender, there’s no way in heck I’d fund the new price, but lenders are doing it. Why, and how?
CA renter | May 23rd, 2009 at 11:46 pmCA Renter, are you referring to purchases at the trustee sale or open market REOs? There is a big difference. If it was on the open market, it’s probably mainly due to the flipper purchasing with all cash (or hard money). The market is still VERY irrational, although in quite different ways than it was 3 years ago.
IRE | May 24th, 2009 at 8:39 amIRE, Local Boy,
Thanks for your perspectives. I have been hearing conflicting things around this.
Skeet
Skeet | May 24th, 2009 at 12:11 pmI’ve seen regular MLS listings that are well-priced get bought up and then flipped a month or so later. These are regular, open-market sales.
CA renter | May 24th, 2009 at 10:56 pm