My new listing in Vista!
An active, income-producing ranch now, bringing in around $100,000 per year, with huge potential.
Subdivide the lower half into 19 homesites (developers are offering to pay $5 million over time to do it for you), harvest the 10,000 palm trees that are worth approximately $1,000,000 wholesale, and then keep the upper portion of 19+ acres for yourself.
The sellers want to cash out now, for tax reasons.
I was waiting for the water question to be answered. Nice property!
Capital Gains going up 33% by the end of the year…I would understand why you’d want to liquidate and move your assets to a more tax friendly investment.
Sounded like a really nice kid. Darned shame he’s forced to unload and break up the family homestead. Must have a lot of good memories tied up there.
agree with #1, the water question is a big question.
as for capital gains going up to 33% translating to a need to sell off the family homestead? that’s odd. is the move really worth it just to save on taxes? what type of more tax friendly investment would warrant selling off the family homestead?
I would question whether a potential cap gains increase is the reason for the sale, as I would the potential income streams.
Great, I get to have people question my integrity here too.
The seller has received multiple opinions from different CPAs that they should sell now. It probably has to do with this being an active business with a $1,000,000+ inventory, and legit offers of $5 million that substantiate the value of the lower half. The main residence is on the smaller lot, so if the two parcels are inherited and one is a business plus real estate whose total worth is determined to be $6-8 million, then I can see a potential tax problem.
I’m not a tax guy, and when a client tells me that they have done their research and have determined that it is in their best interest to sell now, then I go to work.
The income streams too?
If you don’t mind, I’m not going to post the rental agreements here.
There are 10,000 Kentia, King, Queen, Foxtail, Sago, Macozamia, Zamia, Mediterranean Fan, Mexican Fan, Canary, & Pigmy Date trees, and assessing a value of $100 each is low. The quote of $2,000 per canary is very low, because they looked very healthy and mature to me, and I know my way around palm trees.
If in the end you had 19 one-acre lots with pleasant southerly views it would be reasonable to expect new houses to sell for $750,000. Since October you have seen me sell two resale homes nearby for $789,000 and $849,000. A common rule of thumb is to pay 1/3 of the total value for the lot, so $250,000 x 19 = $4,750,000. He has legit offers on the table now with payments spread out over the next few years, but I think the buyer will be tempted to subdivide it themselves, rather than sell to a builder.
Jim, I don’t think they are questioning your integrity. I admit I had a thought of “too good to be true” flash through my mind. I think we are as a society jaded because of the hype we are constantly bombarded with…such as the FB IPO valuation.
I thought a lot about the property after viewing the video and if I had an extra 3 million I would be tempted to buy that property rather than a coastal place, because that property could produce income and has food crops.
In no way am I / would I question your integrity.
I admit I know next to nothing about the key factors in this listing. I do wish to learn something from you and other posters.
My question is that 250k for each lot might be high unless the 05/06 prices are back. I wonder if you could describe how a builder could make money paying $250k/lot on an undeveloped lot in this part of Vista in today’s market?
Thanks in advance,
Beats me, but my 1/3 rule of thumb worked in the old days for spec builders doing onesy, twosy.
Hopefully there are economies of scale when sub-dividing into 19 lots, but agreed, it is raw land and there is a long trail ahead before pouring the first slab.
But offers have been made, so there must be potential.
My first impulse is to say if I had $3 million I would buy. And I think if I had $3 million I would buy a half million dollar house and put the rest in the bank and just retire
I have to agree with Billy’s second thought, and add move out of California too!
Maybe I should say move out of USA????
In no way am I / would I question your integrity.
Thanks, I appreciate you saying that.
I am faced with an intense challenge here. I have to be the perfect realtor.
Bubbleinfo.com gives potential clients a place to learn about the market, and JtR. But as I am finding, some are looking for any reason NOT to use me, and they are watching these comments very carefully. If a regular poster like you questions the material I have delivered on my own listing, then it could cause them to doubt too. Boom, there’s a reason not to use JtR, and off they go with another agent that they have little or no experience with, but at least it isn’t negative.
This is an interesting property. Has potential but also could be a tough sell. It’s something in between a residential property, a commercial property and land development opportunity. I think it’s priced fairly especially considering it can be sub divided to 20 lots. It’s probably going to take commercial like financing which would mean close to a million down. Might want to consider putting it up on loopnet which is more of a commercial listing marketing tool if you don’t get much action from the MLS.
Those canary palms are worth a lot, and will probably appreciate enough in the next 5 years to be worth keeping them.
The others… maybe not, but I don’t know those palms.
What does the city say about sewer/septic for the 19 buildable lots? What DD has the seller done with respect to that?
Where is Tom Tarrant when you need him? Real estate = pay $3m now to get $6m after 5-6 years and a LOT of work and aggravation.
definitely was not questioning your integrity here. I just always look at making major financial decisions for tax purposes and wonder if it really makes good financial sense. We all do it. We all end up making a lot of financial decisions based on tax remification. But ultimately saving on taxes doesn’t always mean it makes good financial sense. Afterall, my CPA told me year after year, even during the peak, that we needed to purchase a property. that’s all.
but then again, not everything is about maximizing financial gains. it may simply be the easiest decision for the family to sell the family estate and be done with all of this complexity. And on the scale of complexity here, this one can be quite complex.
I think you have proven day in and day out that you are true gem when it comes to realtors. and a potential client, if they got their head screwed on correctly, will see that. if after all that you do here, a potential client still decide to go with someone else, then they probably would not be worth your time anyhow.
Thanks, I didn’t think you were.
It is a struggle over here. I like to think that if I put in a good effort on the blog that people will appreciate it, and hopefully be impressed enough that they’ll have me be their agent.
But I’ve have more cases lately that remind me that this is the internet, where loyalty is fleeting and people feel no obligation – they are satisfied to get what they can and keep moving.
I’m trying to think of how I can step up the sales pitch without turning off people. This at a time when I really want to appeal to sellers, and get their listings.
Here is the latest experiment – tell me what you think (less than a minute):
“Here is the latest experiment – tell me what you think:”
Well… the first thought that entered my demented brain was; I wonder if Jim remembers – “Mr. Lucky’s”?
Try not to struggle with it so much, your blog speaks for itself. It’s uniquely you.
Remember? Where do you think they got the name? 😆
I’m just glad I out-lasted them! (They closed, didn’t they?)
Yes, they closed in 04, changing times and demographics – http://www.azcentral.com/ent/music/articles/0912lucky12.html?&wired
gutsy and lucky, all rolled into one. love it!
I tell ya, most people out there can’t handle the truth. That’s the problem. You and I are both in the truth-telling-business. The difference is sugar coated lies to land a client are rewarded handsomely in your business with virtually no downside.
Very sad for us old Pho-town guys:
While venturing up Grand to a part of town not dominated by strip malls, new housing developments and Circle Ks used to add to Mr. Lucky’s mystique, it seems that today’s young clubgoers prefer the Disneyfied Mill Avenue of Tempe or the artsy environs of Scottsdale, which laughably still calls itself “the West’s Most Western Town.”
One question occurs where the lots are located what is the water/sewer situation? At 2 acres it probably can’t be septic tanks and wells. The question then is how far do the lines have to be extended, and would they possibly have to upgraded?
The difference is sugar coated lies to land a client are rewarded handsomely in your business with virtually no downside.
I lose more listings than I win because the truth doesn’t trump ego and greed.
Sellers think that hiring a listing agent is like shopping for a can of beans, and you purely base it on price like everything else.
But we are selling service, not goods that are easily duplicated.
Sellers will shop around until they find someone who agrees with their price, or wins the beauty contest, usually with fake stuff hanging all over their bodies.
I am taking the challenge head-on, knowing how tough it is to convince sellers that it is better to well-price, and sell early.
Do you think if I demonstrated more examples of that program working, it would convince anyone?
Here’s one who agreed with me, check this sales history (another listing I sold for full price):
We have both well water and city water on-site, so it’s available. For the houses I’m sure it would be city water coming to each.
This is an area zoned for one-acre minimum lot sizes, and you only need half-acre for septic so that will probably be what happens. To connect to the sewer system requires annexation, and it isn’t a slam dunk. But septic is a viable solution that many have in the area, and isn’t a barrier to sale – it guarantees a decent yard size!
I live right across the river valley from this property at the end of Valley Crest Drive. It’s a great part of Vista and very beautiful. It’s amazing how rural this area is yet is only a 6 minute drive to Walmart. Many homes in this part of town are on septic and propane. I think on one acre parcels you wouldn’t have too much of a problem having enough space for the leach lines on a septic tank. I hope it doesn’t get developed though, I like it the way it is.
I think this is a good move for you, going up market.
Given all your contacts and history in the area, I think this is a good fit. I have had terrific service from the guys you recommend, and have had a lot of fun renovating this old house. Might be worth hooking up with an attorney and selling some docs as a part of the deal… sort of like the Encinitas beach cottage with the plans for a redo on the desk.
I’m baffled that one of the interested developers can’t pony up the $3 million.
Jim, for 50k over 2011 price no less. 🙂
Thanks for the information. I am surprised by the small lot sizes for septic, although it may well be aerobic septic. Here in the Texas Hill country its now 2 acres for new developments for septic, and 5 if you want a well.
California property tax combined with California taxes laid on a family business ( a working ranch) and new enviromental land use taxes coming, plus a onslaught of additional taxes beginning January 1st….might be a good motive to sell now.
If this ranch is passed onto family members after January 1st the government will take 55% of its value from those family members, they might have to sell it anyway just to pay those taxes.
Remember, Americans work all their life paying income taxes, property taxes, sales taxes—only to have the government raid their farms, ranches and small businesses when they pass away.
Why was my post deleted? All I said was it seems like there is something the seller is not mentioning.
JTR is a temperamental sociopath who bans people for questioning him or disagreeing with him.
Did they let you out already?
34.Why was my post deleted?
See comment #14.
I also don’t like anonymous people suggesting that my clients are hiding something. See comment 33 where J.M. thankfully sheds some light on the tax implications – thanks J. M.!
You flip out and call me a temperamental sociopath just because your comment gets deleted?
I think about the upcoming January 1st taxes because “I” am also involved in a family business that will be taxed to the gills in this state. Businesses look to the future…5-10+ years down the road, what that means to those who would inhertit our life’s work and the implications. Many a controller/accountant are advising their clients on how to deal with their assets pre-January 1st.
It is on my mind, that is for sure!
30.I’m baffled that one of the interested developers can’t pony up the $3 million.
After talking to Bill D., and looking at other builders, it seems they finance everything.
In fact, all the big flipper operations are using some sort of financing too on virtually all deals.
It’s all business!
It’s a business that should be put out of business. But what would be in it for the banks if it were?
I have a friend who has a flipping business; doing about 40 houses per year right now, mostly in low-income areas of L.A.
True, they all use financing, but it’s almost completely hard money. There’s no fannie/freddie financing for derelict or speculative properties. If you think there is, I suggest you talk to some people and see if you can get some. If you can, you’ll be rewarded handsomely because current hard money is 3 points at 10% with 70% lte. You might find some slightly better, but that’s pretty run of the mill.
I was on vacation for 2 weeks and just came across this Vista video. That valley out Buena Creek is one of the nicest semi costal, not too far inland locations for sure. All of these lots would have Southern exposure in the winter and 10 miles to the Ocean breezes in the summer. 10-15 degrees cooler than the next valleys inland in summer. Paradise found for the next owner who can do this piece of property justice, split off build able lots. Lease out the grove and palm business, keep the prime upper lot and build the compound! WATER rights, like gold in hand…