We’ve seen and heard about flippers paying more and more (too much!) in the competitive trustee-sale environment at the court house steps. With the backlog of occupants not vacating the foreclosed properties, there is bound to be some overlap.
The 3,278sf house in this video went back-to-bene in December, but only recently vacated. A few doors up, a flipper paid $810,000 on April 28th for a slightly bigger model on the same side of the street, but there you have to look through the trees to see the golf course.
Lo and behold, both hit the MLS within three days of each other, both priced at $899,000 – and the race to get out first, was on! This one was marked pending today:
If property values are going up fast enough, the flipper will be happy to wait…
Outside of the golf, what’s the attraction of Aviara?
“We’ve seen and heard about flippers paying more and more (too much)! in the competitive trustee-sale environment at the court house steps.”
The flipper house sold for 695k in 1997 near the bottom of the last cycle and it just got picked up for 810k.
Thanks to the massive government effort to support housing prices we may avoid blowing through the last bottom but it looks like it is going to be close.
Here is the flipper’s house:
http://www.youtube.com/watch?v=qQsckkqUBW0
That is just a golf ball waiting to hit a window!
Still, the new rage is flopping. Not listing the property on the mls for the short sale, then flip’n it up from that lower price. Think Jim has pointed this out in a few videos.
JTR – Can you quote what the flipper paid at the steps for this house? Also do you know what the opening bid was for the REO home (which obviously was not bid on by 3rd parties)?
Flipper paid $810,000 end of April, opening bid on the other was $896,357 on December 21st.
The flipper might have rationalized that the REO was on the ‘steps right before Christmas, so it slipped through the investor cracks, and “the market has gotten better since”?
As a result, flipper wasn’t too worried about it submarine-ing his deal?
Gotta go with flipper right? The banks are really hard to work with and the road noise is minus $$$. The flipper’s hardwood floors are a good selling point too 🙂
810k by the flipper and listed at 900k??? i cannot imagine that being worth the time,effort, risk.
900k – 50k cost of sale – 15k of fix = 835k minus cost of $$$, time, ins, taxes (both back and current) we’ll guess $10k and any reduction from the list price.
Thus $825k = a whopping $15k profit in 3-4 months which likely goes to the capital investors anyway.
Winner in this transaction are the agents who make a risk free 50k.
ps: If I thought the home would sell at $900k and needed $30k of work/taxes/fees then my highest bid would be in the mid $600k range plus costs.
Need to be able to absorb the unknown costs of the interior, the risk of time, the risk of a 10% over guess on the sale price, etc.
In an unfortunate scenario with a 10% hit to the price you are effectively at $800k – 50k costs – 50k cost of sale = 700k which is only a 10%-15% profit on our all cash costs….no one is getting rich off of those returns.
Maybe the flipper thinks he is lowballing it and was going to get a ton of offers and sell for 5-10% above list price. Bet he didn’t expect the REO competition.
Or maybe he just sucks at this.
At least it won’t suck for the buyer. That’s a pretty decent house they’ll be getting there.
An Ikea-lover’s dream house.
BTW, do you think an aquarium adds value to a house, or is it a wash?
Interesting. That one with the YouTube link (“the flipper’s house”) is on the MLS now (Spoonbill, right?) and – at least according to the Zip Realty site – was last sold on Oct 31, 2002 for $1.0 million.
All this time I thought that the “last sold” numbers on Zip Realty were trustworthy. I also don’t see any info on redfin about a recent sale of this house. Am I missing something?
It’s correct – the flipper house sales history:
10/02 = $1,000,000
10/97 = $695,000
11/91 = $640,000
Pavona was the first built in Aviara, and was the premier tract of its time. There was nothing like it in Carlsbad – bigger, deluxe, high-end homes.
The REO house was the original owner, who paid $635,000 in 5/94, which I believe was the model and one of the last sold new.