No techie asked to see one of these REOs after someone buy one, and what happens then.
This house looked just like the $150,000 graffiti-mansion in Vista when these folks bought it for $163,000 in January, 2009.
They fixed it up quick, and in March listed it for sale – at $265,000.
It went pending the first week. Here’s a youtube tour:
Looks really nice. Maybe a little optimistic on the cost to do it? – unless as you said they did it themselves.
Regardless, the flippers did a great job. They deserve to make some dough on it.
Sweet neighboorhood…..I’m surprised your Benz wasn’t stolen while you were taping.
Jim, where’s the ice cream truck!!!!
If that house looked like the Vista one, they did a very nice job on the flip.
It’s unfortunate that the flippers are outbidding the real (owner-occupied) buyers, because some poor families could actually afford the house at $163K-ish. They’d never make it look as nice as this flipper, but this house will probably end up reverting back to its roots anyway. I’ve seen that happen over and over and over again, where a flipper makes it look very nice, but within a year or two, it’s back to being junked-out. It’s all about the neighborhood.
Could your really spend only forty grand on the Vista dump and make it look like this? Factoring in the mold, the foundation crack, and everything else?
This one didn’t have a crack, but if you did all the work yourself, and you were a real handy fella, I think so.
Then the real gold would be to do this not to flip, but to live in. If you could find one that was in worse condition than the neighborhood is (I’m guessing the Vista one qualifies, more so than this one, since the neighborhood looks a bit iffy on this one, to say the least), and then maybe even spend a little more making it even nicer than this because you are going to live there personally, and are willing to put in the sweat equity, that’s a great play. Heck, before the bubble, I think a lot of people bought fixers to actually move into eventually as opposed to trying to flip them.
jim
What do you think they had into this flip if they did the labor themselves?I’m thinking 30-40 grand.
Minor nit. Those cabinets are CDW (Contractors Discount Warehouse) not Home Depot. I’ve used them myself.
I also saw the “blank slate” backyard, agreed with the flipper, and decided that a favor from Mr. G (Marathon Seed owner and family friend) wasn’t cost effective. Better to leave the yard to the imagination.
Sadly, this is a case of being pulled down by your neighbors.
Appears to be a serious remod. With electrical & plumbing involved, were the necessary permits/inspections obtained?
If not, who’s on the hook for serious defects?
What, no crack? In Vista?
I was just in a house the other day thinking…what is that smell? I couldn’t quite peg it, but after your comment it’s all clear. No question, it was burnt tortillas recently picked over by those dead rats in the corner. Nice visual, Jim.
Also you have to wonder about the quality issues. There is a reason cement backerboard is recommended behind tile rather than just sticking it to the wall. Cheap-ass carpet will go bad amazingly soon. Hard to tell from a video but I’d be concerned that the place would fall apart in just a couple years.
It’s possible the old drywall was pulled off and backerboard was screwed directly to the studs. When done properly in that way it will indeed look like the tile is on drywall but it ain’t. I’ve done it numerous times
There are some other odd things about that bathroom. First, the toilet doesn’t mount to the floor, it mounts to the wall.
Second, the shower tiles on the wall with the shower head are a good 4-6 inches further out than the wall behind the toilet. Why would that be done?
Is it possible this bath was added in? Doesn’t seem likely from the floor plan, but I don’t have a better explanation for the things above.
My landlord bought the duplex I currently live in. When a friend staying overnight at my house was taking a shower, the soap dish fell off, revealing a black mold infestation. Here are the pictures:
http://www.flickr.com/photos/slashchick/210708700/
My landlord hired a contractor, who said the “quick fix” of the shower the previous owner had done didn’t have backerboard. He had glued the tile directly onto the wall. In 2 years, the mold ad gotten out of control.
My landlord had to redo the entire bathroom, and HIS bathroom on the other side, and reimburse me for over a week of free rent since it was my only shower and I had to shower at a friend’s house.
Moral of the story: Always use backerboard.
Cost my landlord oh, probably about $12K just to fix that one. And prev owner was an idiot about a bunch of other stuff, too.
-Erica
P.S. My landlord is upside down in a bad way, though he doesn’t seem to mind — he just bought a new car.
LB,
Good catch. I had noticed the toilet, but didn’t notice the shower wall. That is very strange. Any idea why it would be done that way?
What, no crack? In Vista?
Both Oceanside and Vista are more crank than crack.
Wow, that’s amazing that that house went for $265k.
Thanks for the video Jim. I also saw new doors and knobs. Everything was low-end, which I suppose is appropriate for the neighborhood and price range. I think once you factor in closing costs and the payment and taxes, the costs really accumulate, hence,the flipper is taking a risk because of the neighborhood.
I would rather live in a nicer neighborhood and fix up a house as I could afford to than to buy in a lesser neighborhood where the house is “tastefully remodeled”.
Was that your car? NICE
Wow, who wants to wear a diamond buried in a turd? That neighborhood will never be up to snuff with that house. Having the ‘nicer’ looking house in a neighborhood of crap is not to your advantage.
I wonder what benefit there might be if you put in another $1K to put some turf in on the adjacent neighbors’ yards?
This “fixer” reminds me of what it was like looking for a home before and during the early part of the bubble years. Almost every place was “fixed” using the cheapest looking stuff they could buy. You would have to tear it out or just get used to it. Though this place looks okay, it is pretty clear it will fall apart in 2-3 years.
Almost every place was “fixed” using the cheapest looking stuff they could buy.
This is my rant on stainless steel appliances. I feel that stainless steel appliances became popular because that used to be a sign of quality. The more expensive, commercial grade kitchens had those types of appliances. Now that everyone and their mother wants stainless steel appliances a bunch of manufacturers take the same crappy appliance, throw a stainless steel “veneer” and jack the price by 2X.
Most of the stainless steel appliances I see on HGTV and in these flips just look cheap.
When we bought our house in 1995, we steered clear of the “fluff ‘n’ buffs” because we were young and underemployed and preferred to fix old mistakes rather than brand new mistakes.
“Wow, who wants to wear a diamond buried in a turd? That neighborhood will never be up to snuff with that house. Having the ‘nicer’ looking house in a neighborhood of crap is not to your advantage.”
I understand this point, and am conflicted. I’d really like to see quality go up in these trashy neighborhoods that have potential. I can’t help but wonder if more widespread quality might beget more pride of ownership (and thus maintained quality).
“Fluff’n’Buff” a great new phrase to add to the commentary Jim.
Jim even if it went pending, I wonder will it get financing. That neighborhood comp might not support the asking price and then the bank wont lend. The banks have to use the new Appraisal form 1004MC after April 1, you must show six month of trends in pricing. Given that the January sale price was 163k, wont this negatively affect a bank being able to issuing a 265k loan against the same property. That is a 63% increase in value in less than four months. Even if the property was assessed under true value for the January sale it still set actual market value. How can a underwriter get this loan to his loan officer and justify funding it?
You always want to live in the dumpiest house on the block. That way, your neighbors do the work of raising your house price instead of you working to raise theirs.
I’ve improved my house a bit over the neighborhood. Several of my neighbors followed suit and improved their properties as well and the block looks a lot nicer now. Yes, there are plenty of arguments against putting money into a house in a dumpy neighborhood, but at the end of the day YOU have to live there (assuming you’re an owner and not a flipper.) I’ve done all my renovations on the assumption that I may have to live with them for the next 30 years.
Also maybe new electrical trim (covers, etc.) those are dirt cheap, but its a nice detail.
I think the toilet on the wall is an institutional thing for easier cleaning. If you’ve just gotten out of prison, you’ll feel right at home.
Sure, he didn’t spend a ton of cash but least it habitable now.
“You always want to live in the dumpiest house on the block. That way, your neighbors do the work of raising your house price instead of you working to raise theirs.”
You must be a democrat. 😉 That’s right, make sure you’re in the wagon and not pulling the wagon. If everyone thought that way, the wagon would go nowhere!
Point of information, backer board alone is not enough, you must have a vapor barrier behind the backer board or you will have mold. Or put Kerdi over drywall or dens armor plus (Kerdi is the bees knees). Google John Bridge tiling forum.
As has been said, that shower may be okay. It is SOP to bring tile out beyond the backer board and over DW, with thinset on the BB and joint compound on the DW. Anyone outside the US would comment on the lack of plaster veneer on the walls…..
All of this is an argument for doing the fix-up oneself. Who knows what the flipper did? Maybe okay, maybe it barks at traffic (LOL).
You forgot to add the exterior costs to the 30-40K estimate. The roof, paint and front yard probably add another 15-20K.
They should have bought 163K worth of Ford stock in January, it would be worth over 400K today and they wouldn’t have had to put another 50-60K on top of the 163K.
265K x 2 = 530K. I would easily pay a 100% premium to live in Encinitas or 75% premium to live in Carlsbad. Actually, looking at recent REO sales, 1500 sq/ft SFR, 2/3 BR, 2 BA can be found between $400K to $530K in Encinitas. But I guess if the buyers are leasing two cars and wearing $150 jeans how can they come up with the 20% down?