Hat tip to Rob Dawg for sending in the latest sighting of the guy who was the face of the mortgage crisis. Here are two links that outline his story:Casey’s wikipedia page His 10 mistakes
Where is he now? Yep, he’s a realtor:
Excerpted from this NPR article:Link to article
New research and data suggest that the practices of house flippers fed the bubble of the early 2000s. Much of the blame for the housing crash has fallen on subprime borrowers and people who bought and lived in homes they couldn’t afford.
But researchers are now coming to understand that a big part of the problem was people with better-than-average credit scores who owned multiple homes — not subprime buyers, but real estate investors, landlords and flippers.
Now that the big investors have virtually stopped buying homes, a legislator wants to find a way to regulate them.
Typically the term “institutional investor” refers to private investment firms that buy dozens of residential properties with the explicit aim of generating a steady income stream through rentals. Often they invest the money of wealthy individuals and public pension funds, like those established for California state workers and teachers.
The best example is Blackstone, a publicly traded Wall Street firm that barrelled into the country’s single-family home market in the depths of the Great Recession in the late 2000s. Through its residential investment-focused subsidiary, Invitation Homes, Blackstone is now the largest owner of single-family homes nationwide. In California, they own about 13,000 homes.
But firms such as Blackstone have stopped buying wide swaths of California homes. According to the real estate data firm ATTOM Data Solutions, which defines institutional investors as entities that buy 10 or more homes in a given year, institutional investors accounted for less than 2 percent of the state’s single-family home and condo sales in 2017.
That’s a pretty steep drop from as recently as 2012, when institutional investors accounted for about 7 percent of sales.
Why the decline? California no longer has a glut of cheap houses that can be easily gobbled up in foreclosure auctions. A sustained economic recovery and a lack of construction of new housing has sent housing prices skyrocketing. It’s now too expensive for institutional investors to buy lots of California homes. Blackstone’s Invitation Homes bought only 82 California houses last year.
Watch out for those investment groups – hat tip Richard!
A federal complaint accuses an Irvine real estate firm and its executives of siphoning off proceeds from a house-flipping venture financed largely from investors’ retirement savings funds.
Hoplon Financial Group and its two top executives — Hoplon founder and Chief Executive Daniel Benjamin Vazquez Sr., 56, of Orange County and Hoplon Chief Operating Officer Gilbert Fluetsch, 52, of Escondido — are accused of numerous securities violations in a U.S. Securities & Exchange Commission complaint filed Friday, Jan. 12.
Vazquez and Fluetsch couldn’t be reached for comment. Nor could Hoplon Financial Group be reached at the phone number posted on its website.
“Our goal is to protect our clients’ assets and safeguard what they have worked hard to build,” Hoplon’s LinkedIn page says.
According to the SEC complaint, filed in federal court in Santa Ana, Vazquez and his companies pitched their services to investors found through cold-calling and asking them to roll over their 401(k) retirement accounts into individual retirement accounts handled by brokers he was associated with.
Twenty-seven investors put up $2.18 million from 2011 to 2014 after Vazquez and Fluetsch promised their money would be used to purchase and renovate homes in a venture called the New Economic Opportunities Fund LLC, or NEON.
“In reality, they were draining most of the money from NEON’s accounts for their own purposes,” the complaint contends.
NEON purchased eight Southern California properties in 2012 and 2013, spending more than $767,000 on repairs. Subsequent sales generated $917,322 in profits, all of which were diverted to Hoplon.
“As of today, NEON has no known assets. All funds in its bank accounts have been depleted, and it holds no properties in its name,” the complaint said.
Under terms of the offering, Hoplon, Vazquez and Fluetsch were entitled to $188,197 in compensation for managing NEON, but diverted $968,436 to Hoplon and themselves.
In addition, the complaint said, NEON funds were used to pay Hoplon expenses, to cover payments for luxury cars Hoplon purchased or leased for Vazquez’ and Fluetsch’s use, and to cover such personal expenses as sports club memberships.
The complaint said $59,000 in NEON funds were diverted to pay for property improvements on Vazquez’ home and $6,500 more was spent on work performed on Fluetsch’s house.
Hoplon, Vazquez and Fluetsch “misused substantial amounts of NEON funds, resulting in a total loss to investors,” the complaint said.Link to Article
With the lack of new homes available, the flipped homes have become a substitute for buyers who don’t want to do any repairs or improvements.
Here are four good questions:
Question #1: Have the Renovations Been Permitted?
Question #2: Were the Sub Contractors Licensed, Bonded ,and Insured?
Question #3: Can I See the Before Photos?
Question #4: Do the Windows Have a Double-Lifetime Warranty?
A good article on the details:Click to article
This is probably the baseline for regular houses in Carlsbad for the next few months – this just closed for $700,000 cash:
Buy rental properties! San Diego’s vacancy rate is also 2.9%, same as L.A.
A vision of redeveloping Hillcrest similar to what’s been done in Portland. With there being so much concern about less-fortunate getting shut out of adequate housing, every local municipality should be approving projects like this:
This sold for $1,139,000 cash on 8/30/17:
Hat tip to daytrip for sending this in – the price is now down to $699,000:
Homes near this Chapel Drive neighborhood fetch about $1.5 million, and Crowell priced this property as such. She figures it will cost $300,000 to stabilize the hill that got washed away during February’s rains, $250,000 to fully upgrade the 2,385-square-foot home and leave $100,000 left over for profit. “That’s the going price in this neighborhood,” she said. “The house is still near the best schools.”
The couple selling the house is in their 90s and were forced to move out of the home they’ve lived in since 1968 this winter. While the property underneath the home is shaky, Crowell said the four-bedroom, three-bathroom home is in really good shape.”
As of Monday, Crowell said she had at least 10 inquiries on the home. She said she felt supremely confident she’d sell it — and soon. But she fully recognized that anywhere else in the country, a Realtor who asked for nearly $1 million for a home sitting precariously on a landslide and “you’d be nuts.”