Sunday, March 15, 2009

Flip or Flop?

You’ll notice lately that I’ve been featuring a lot of Belmont Heights properties. That’s because while I’ve seen evidence that a decent number of Belmont Shore sellers are willing to deal, Belmont Heights sellers seem to be drinking a particularly strong blend of Kool-Aid.

According to Anonymous, this RE in the LBC-featured property was recently picked up by a real estate agent in an attempted flip. Attempted, I said.

He apparently bought it from under the bank at auction, put a little elbow grease into it, slapped together a new listing with a whopping three photos (all exterior—smart!), and now expects a nice fat profit for his "backbreaking" work.

Yep, a profit.

Flipping houses.

In the middle of the worst housing decline anyone alive has ever seen.

Good thinking, pal.

Here is the new listing:

Address: 4201 E 3rd St, 90814
Asking Price: $599,000 (increased by $84,100 from the January price)
Year Built: 1922
Size: 2 beds, 1 bath, 1,163 sq. ft.
$/Sq. Ft.: $515 (up from $443)
Purchase price: $576,250 (by bank—I don’t know what the realtor paid)
Purchase date: 11/6/2008
MLS#: P678859
On Redfin: 4 days
Down Payment: $120,000 (an increase of $17,000)
Monthly Payment: $3,300 (up from an already ridiculous $2,900)
Income Requirement: $171,000 (up from $147,000)
Description: Classic Spanish single story remodeled home on corner lot with very bright and cheery rooms. Den/sunroom for office or even possible 3rd bedroom. New granite countertop kitchen and beautiful darker stained cabinets with all new stainless steel appliances included(microwave, dbl door refrig, gas stove with above mounted microwave). Laundry room off kitchen with new washer/dryer included. New tiled bath, new classic front door, newer windows and floor furnace, newly painted inside and out with major new landscaping, new copper plumbing throughout, new electric service, new window blind coverings, wood floors, custom new tile, and unique architecture of years past along with detached garage with workshop cabinets, work area, and unique driveway on Roswell all combined make this well worth purchasing. AMAZING HOME IN HEART OF BELMONT HEIGHTS WITH ALMOST NEW EVERYTHING YOU COULD ASK FOR. YOU MUST SEE THIS PROPERTY TO APPRECIATE IT.

He did a really good job sprucing up the exterior. To wit:

Quite a difference!

This shot of the phone/power lines isn't too flattering, but the exterior still looks much better. You have to give the guy a lot of credit.

The interior, however, is another story altogether. If you recall, the first time it was listed the inside was in utter shambles and photos of the bathrooms and kitchen were notably absent (always, and I mean ALWAYS, indicative of major issues). Check these out from the old listing:

Feral dust bunnies, gnashing at your toes.

Well, despite what I'm sure are some decent improvements, we’re still not treated to any interior photos. Dumb move.

What exactly is the point of installing a “New granite countertop kitchen and beautiful darker stained cabinets with all new stainless steel appliances” if you don’t show photos? I bet the inside looks pretty nice, judging by what’s been done to the outside, but we’ll never know unless we take a total leap of faith and go to an open house for what we already know is a severely overpriced property. Yeah, no thanks.

I’ll remind you that this house has been struggling on the market for more than a year with no action. It was in desperate need of attention and it appears—outwardly, at least—that the flipper provided some. Sadly, no matter how much lipstick you put on this pig, it’s still a corner location at a four-way-stop intersection (which I never noticed before). Incredibly unappealing.

The asking price of $599,000 in this environment is straight up greedtarded. Dude, it didn’t sell when it was a fixer-upper priced at $514,000. And now because you installed some countertops, copper pipes, and appliances it suddenly has a clean shot at selling for $84,000 MORE?

Boy, I would expect a little more investing savvy from a real estate agent.

HA! Just kidding, no I wouldn’t.

You may think you’re undercutting the neighbors by asking $599k but you’re not. Look at some of these Days on Market:

$670,900 305 Quincy Ave
0.23 miles3 bd / 1 ba 1,242 Sq. Ft. - 177 days

$674,000 4315 Broadway
0.26 miles2 bd / 1 ba 1,254 Sq. Ft. - 277 days

$575,000 218 Ximeno Ave
0.34 miles2 bd / 2 ba 1,191 Sq. Ft. - 175 days

$449,000 4741 E Colorado St
0.38 miles2 bd / 1 ba 922 Sq. Ft. - 231 days

$599,000 3901 E 2nd St
0.44 miles3 bd / 2 ba 1,394 Sq. Ft. - 269 days

And just take a gander at some that have actually sold:

$430,000 4322 E 4th St Sold on Feb 12, 2009
0.24 miles 3 bd / 1 ba 938 Sq. Ft.

$440,000 435 Roswell Ave Sold on Jan 27, 2009
0.28 miles 2 bd / 1 ba 927 Sq. Ft.

$425,675 229 Loma Ave Sold on Jan 16, 2009
0.46 miles 2 bd / 1 ba 1,032 Sq. Ft.

Nothing above $440,000 in 2009. Let's go further back:

$567,000 638 Quincy Ave Sold on Dec 24, 2008
0.49 miles 3 bd / 1 ba 1,320 Sq. Ft.

$500,000 201 Quincy Ave Sold on Dec 16, 2008
0.46 miles 2 bd / 1 ba 784 Sq. Ft.

$577,000 603 Grand Ave Sold on Dec 11, 2008
0.46 miles 2 bd / 1 ba 1,056 Sq. Ft.

$434,284 4319 E 5th St Sold on Nov 07, 2008
0.33 miles 2 bd / 1 ba 760 Sq. Ft.

$495,000 4819 E Trimble Ct Sold on Oct 03, 2008
0.43 miles 2 bd / 1 ba 884 Sq. Ft.

$577,000 was the highest price in October through December 2008. And if we step into our Way Back Machine and travel all the way back to September, it's the first time we see anything above this flipper's current asking price of $599,000.

$615,090 215 Roycroft Ave Sold on Sep 30, 2008
0.43 miles 2 bd / 1 ba 984 Sq. Ft.

$600,000 4140 E Colorado St Sold on Sep 16, 2008
0.1 miles 2 bd / 1 ba 1,230 Sq. Ft.

Yes, yes. These are not exact comps and we don't know what condition these places were in--but you get the overall point. This dude is pricing in fantasy land.

Here are the facts, Flippy: if you want any chance at selling (or even want to get in line with the price per square foot of nearby comps!) you’d need to slash nearly $200,000 from the asking price TODAY.

But I have a strong suspicion you’re not going to do that.

Plus, what the hell do I know? I’m not a "professional" like you are, just a blogger. But in my unprofessional opinion, unless you picked this thing up for $300k at the auction, you are straight up FUCKED.

I hope for your sake there is one more drunken knife catcher left in Long Beach, because if not, your losses will be in the hundreds of thousands when this is all over.

Flippin’ ain’t easy, but then neither is resisting delusions of expertise.


  1. FYI: Just like ALL the green surrounding the house the red Porsche was a 'house opening' plant as well.....

  2. Well, some way, Belmont Heights is a kind of special. There are some seasoned realtors, who are "charming bungalow" specialists. They're successfully targeting a small, but powerful segment of potential buyers, same sex couples.
    Local area realtors know very well, same sex domestic partners enjoy higher incomes, more relaxed lending standards, they don't have to worry about kids, schools, play areas (I mean for the kids)...


  3. "Here are the facts, Flippy..."

    You just earned a bookmark in my browser. Bravo.

  4. Your post was lots of fun to read and very true. If the home has seen little activity then there's obviously something wrong in the listing.

  5. paint and mild landscaping is worth 84K in my book..

    where do I sign????

    man, 2011 is looking WAY more realistic for a bottom on the LBC. One more year of savings!!!