Are you thinking about buying a property at a trustee sale, and wondering about the competition?
Here’s a flipper who purchased this 2,031sf house in Oceanside for $294,500 in February, 2009, and sold it again in April for $390,000. (It was listed for $379,900, new buyer went VA):
The risks of buying at a trustee sale are a big enough burden, to have to compete with guys like this make it even more interesting!
I have to admit that pocket of homes looks pretty nice and that street looks pretty wide which is perfect for speeding cars. That graffiti shot around the corner was perfect timing and if the adjacent neighborhood had above ground power lines, I wouldn’t be surprised to see a few Chuck Taylor Hi-tops strung across them.
This sale must have got done before the new appraisal rules just went into effect. Bruce Norris was ranting and raving about the new rules because he knows they are going to put the kabosh on himself and other big time flippers like this guy on the court house steps. Bet the buyer has no idea.
Apparently the adage “There’s a sucker born every minute is true”
I would pay $285k to live there.
I guess John Mann was a “knifecatcher” back in January/February. Guy’s making a killing! I guess good sod goes a long way.
And, $390K is still fairly cheap. Assuming 20% down, 5% loan, the new owner is paying $1,675/month. That means a family making $75K puts 1/3 of their income to housing.
Sorry shadash and fellow naysayers, that’s still a good play for the person who bought this place.
We are still turning our neighborhoods into Las Vegas crap tables.
Big question: Have we reached the point where we need to stop doing comps the old way? With criminal banks (yes, they are still criminal) and so much artificial intervention (govt.), too many flippers and other institutions are gaming the system. How are we every going to figure out what a house is really worth?
More important, this is still a continuous ponzi scheme that encourages the corruption of all the parties that are suppose to make the system work.
BottomFisher, I don’t know the new rules, but you may have anwered my question. I’ll do some research.
This was a VA purchase so they probably put 3% down making the payment $2150. Add $350 per month for taxes and it looks more like 50% of their income going to this. I’m sure the person who bought this is a doctor making 150k and just decided it would be prudent to live in a blue collar neighborhood.
I can’t believe people are still willing to spend nearly $400K to live in a modest house in the ‘back gate’ area.
Makes me wonder what the flipper did inside this thing, plate it with solid gold? With buy/sell/renovation costs, I wonder what the actual profit was on this flip?
Mozart.
Tell me where I can get one of these 100% 5% loans.
I’ll take 5 please.
Chuck Ponzi
‘I would pay $285k to live there.’
I paid more than 2x to live elsewhere in a smaller house.
I’m not sure if I would call that a blue collar neighborhood.
Definitely a white socks up to kneecaps neighborhood.
I guess VA tells the whole story.
Jim, do you have any information on how he sold this? Does he have his own broker license or does he use other agents? If he does it himself, or if you can figure it out some other way, what does he have on the MLS right now?
Bruce Norris does not sleep. He waits.
There is no “ctrl” button on Bruce Norris’ computer. He is always in control.
When the boogeyman goes to bed at night he checks his closet for Bruce Norris.
IRE,
Jon Mann is the broker, and the ownership is in a corporate name. I don’t know the connection, but they own 40 properties now, and I’d guess that 20-30 of them are on the market.
I just Googled Bruce Norris. Now I’m going Google Toxic Assets.
Looks like delusional housing in CA again…
Flipping doesn’t work so well in the midwest. The guy down the street installed some new windows and plopped a for sale by owner sign in his yard asking $189K on his flip.
A much larger and nicer short sale lists for $139K across the street, which has sat for months with no luck.
We aren’t in ho-dunk land either… our county is the 9th fastest-growing in the US
Nice job as always Jim
A VA loan for $390k does not require a downpayment.
There is a VA funding fee but that is waived if the veteran has been rated by the VA with a disability of 10% or more.
I’m with mybleachhouse, the buyer’s payment is at least $2,500 per month. You might be able to rent it for that, on a good day, but $2,000 is more reasonable.
Thanks – that is typical for the mega operators at trustee sales. The money may come from a hedge fund or private investment trust. It is unlikely that it’s all his money, but he is probably charging 10% in fees (off the total transaction price, not just the profits) on the ones that aren’t self-funded.
Mozart.
Tell me where I can get one of these 100% 5% loans.
I’ll take 5 please.
He did say he felt like it was 2002 again. Perhaps he’s reliving the lending days of Fog-A-Mirror mortgages too.
? about these trustee sales. You have to have cash for the entire purchase right? Are individual homebuyers getting any deals at these sales or is it just investors who have the large amount of cash required?
Erin, yes, you must have all cash at the time of the sale. There is hard money available – if you can put 20% down they will lend the rest to you but they must “like” the deal. For me, I bought my first house at the trustee sale for a personal and rental residence (it is kind of like a 4-plex), but I plan to buy more now that I know how the process works and see the $$$ passing through every day.
Any day trader can buy GM at $1 and sell it at $2. Happened all the time, doesn’t make it an arbitrary gamble. Collectively they’ve been losing all their money and that’s most revealing.
Amazing that thousands of people still think GM is worth more than a penny. Look it up.
IRE,
Thank-you for answering my question. Where did you go to learn about the process of working with a hard-money lender?