Remember this fixer near the Back Gate in Oceanside?
One of our blog readers ended up buying it, unrelated to this video’s appearance here on July 1st:
In the meantime, other flippers have been busy in the area buying REOs and fixing them up to sell – here are other recent examples nearby:
| Sq. ft. | Previous SP | List Price | Sales Price | COE | List Price | Sales Price | COE | Fin. |
| 1,564sf | $118,500 2/94 | $160,900 | $167,500 | 7/09 | $289,000 | $295,000 | 10/09 | VA |
| 1,236sf | $451,000 10/05 | $171,600 | $172,000 | 5/09 | $278,000 | $295,000 | 9/09 | FHA* |
| 1,352sf | $211,000 1/02 | $164,900 | $165,000 | 5/09 | $278,000 | $306,000 | 9/09 | FHA* |
*Flips by Joella and John, from the Nightline show (see RE VIDEOS in right column)
Here’s how the latest flip turned out:
More southland housing news in the MSM:
http://latimesblogs.latimes.com/laland/2009/11/real-estate-foreclosures-realtors-fha.html
http://blogs.wsj.com/developments/2009/11/11/more-high-end-homes-headed-to-foreclosure/
What do you know all FHA or VA. Couldn’t have guessed that.
There is still some way to go on the downside. The flips should be around the fixer prices. These places fixed up should be going for just under $200,000.
No, Doug. At $200K, the flippers would be selling at a loss.
If someone is willing to buy the place for $295K, they’re definitely welcome to it. That’s a beautifully fixed up home there! Turnkey is dead-on right!
I have no objections to buying from flippers as long as they’ve added true value to the home.
Jim, congrats on the direct link from WSJ
Doug r, is your opinion based on the location(near the back gate)?
My opinion is based on housing should be about 4-5x local average incomes. 1995 prices plus a couple of percent looks about right.
FHA is the new subprime.
Jim,
Great use of video — especially the before and after effect. Question, did you have to battle off multiple offers to win at $170K? How did you know what to advise your clients on what to bid?
Francois, the larger point is that a buyer shouldn’t have to through a flipper to get a house. The banks are only selling to cash buyers, which means the average buyer has no shot at the deal. End user buyers have to pay the flipper premium. That sucks.
Art Eclectic – the only way to stop the flippers business is to refuse to buy from them. That’s not going to happen, so we’re all stuck paying the premium. Capitalism at work. Dave Ramsey is right…cash is king!
Nothing revitalizes a block better than a couple good flips. Here’s to capitalism.
Do these clients give you full disclosure to release this? I’m putting a sign on our flips with Bryce that will read “JIM DO NOT ENTER”.
“Nothing revitalizes a block better than a couple good flips. Here’s to capitalism.”
Ya right. It’s what gives us a low quality shoddy Walmar brand of culture.
I knew there was something wrong with capitalism – and just more reasons to rent.
“Nothing revitalizes a block better than a couple good new owners on an improvement spree. Here’s to capitalism.”
Fixed that for you. My block has seen 7 houses go through serious remodels as new owners moved in over the past 5 years. Only one was a flip. The block looks twice as good as it did when I bought here in 2002. Score: Flippers 1, End-User Owners 6
I don’t know about you but that house looks like it’s worth $800,000 california dollars.
ArtEclectic is a sage!
In the mean time, here’s to commercial real estate!
http://forum.brokeroutpost.com/loans/forum/2/281113.htm
Totally agree with Art Electric.
One of these days, we’ll understand houses are meant to shelter families.
I can’t wait for the day when interest rates rise so the housing market can be freed of the “get rich quick” types. Only then will we be able to get on with building a real economy.
Until then, housing prices will continue to be dictated by the free market system, just like in any other nation with a capitalist based economy.
We simply have to accept that home ownership is not for everyone. If you can’t play the game, you can’t be in the game. It’s harsh at times, but that’s just the way it is.
“Until then, housing prices will continue to be dictated by the free market system, just like in any other nation with a capitalist based economy.”
So does that mean that when interest rates rise, the system won’t be a free market anymore? Sorry, that doesn’t compute.
I think Arteclectic is just pointing out how the particular conditions right now have really brought out the sharks. For the regular buyer, if the property isn’t some auction piece that got flipped, then it’s a short sale complete with a mess on the seller/bank side and a looonng wait even if they do get the bid on the other end. This market is not the norm, nor should it be. Funny, my family has lived in the San Diego area for three generations and none of them in the past has had to go through the crazy acrobatics just to buy a house that buyers are having to do now.
Oops – meant to say I agree with CArenter’s point (Arteclectic too)
Thought I would chime in to clear up some of the questions and comments concerning this house.
First, I would like to say thanks for Jim running such a blog as it was BECAUSE of bubbleinfo that we decided to buy and try and “flip” this house.
We are not your normal “flippers” if there is a such a thing. We are regular people who saw an opportunity to learn how to update and refurbish a house and perhaps make a profit along the way. If it worked out we would probably do more, if not we would tuck our tail between our legs and head for the hills. We had always thought about either doing a major remodel on the home we live in, or about buying a higher-end fixer to upgrade for ourselves, so this was going to be a learning experience towards that as well.
Now on to the comments. We looked at and bid on a number of homes before getting this one, and consider ourselves lucky that we got this one since we were chosen from a huge number of offers. Cash is not just king on many of these flippers, it is required because the homes are in a condition that traditional lenders cannot lend on them without major improvements. In this house, every window had to be removed and either replaced or re-installed due to obvious problems with the previous owners attempt to install them. Other homes we looked at had cracked slabs, numerous unpermitted rooms, or other “unsafe” conditions that in many cases the potential buyer would not be able to get conventional financing.
For all you would be flippers, I also want to point out that we did nearly all the work ourselves which kept our costs down quit a bit. The neighbors on either side and behind the house were very happy to see the house being renovated as they have also been renovating the houses they were in, and felt it was good for the whole neighborhood.
Yes, we are capitalists, and we do believe in a free market economy, but understand this is not as easy as it looks.
Thanks RojaFlipper!
Good to note that you did the work yourself – those thinking of flipping have to consider the cost and inconvenience of upgrading the property.
How many hours do you think it took to complete this project?
It took over 700 hours, not counting any driving back and forth from Scripps Ranch to actually get there. People definitely need to take into account how far away they live from a flipper before they take one on, even if they are not doing most of the work, but definitely if they are.
“This market brings out the sharks” If you think that purchasing a piece of property and selling it to a sucker for a profit is easy, I recommend that you get in the game. It may look easy to you. That is because you don’t know S==T about what it takes to “Flip” a house. It is NOT like that Flipping Out moron who drives around all day in a S-Class Mercedes and pitches a hissy fit at everybody he sees. It is complicated, dirty, hard work. RojaFlipper did an excellent job on this property. My congratulations on a job well done.
Until then, housing prices will continue to be dictated by the free market system, just like in any other nation with a capitalist based economy.
We simply have to accept that home ownership is not for everyone. If you can’t play the game, you can’t be in the game. It’s harsh at times, but that’s just the way it is.
François Caron | November 12th, 2009 at 4:54 am
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If $8,000 tax credits from a bankrupt federal govt (and $10,000 credits from a bankrupt state on new homes), and the Fed buying up MBSs in addition to Treasuries (to keep interest rates artificially suppressed), plus the mortgage interest deductions and government-mandated foreclosure moratoriums, and the government telling banks not to foreclose (and they’ll get TARP funds if them comply)…is a free market; well, I just don’t know how one could debate with you.
Oh, I forgot to add: 3.5% FHA (taxpayer-backed!) mortgages, (now govt-owned/controlled) GSEs being the sole mortgage lenders, etc.
NOTHING about this market is “free market.” NOTHING! That’s why so many of us are upset. They are protecting and rewarding the irresponsible idiots (borrowers and lenders, alike) at the expense of the responsible people who didn’t over-encumber themselves, and didn’t loan money to people who had no ability to pay back their loans.