Thursday, February 11, 2010

Time Keeps on Slippin'

Yet another brain-dead idiot who doesn't bother to include interior photos of the property. You should be embarrassed for yourself.

383 BAY SHORE Ave #308
Asking Price: $428,900
Long Beach, CA 90803
Beds: 1
Baths: 1
Sq. Ft.: 792
$/Sq. Ft.: $542
Year Built: 1965
MLS#: P711907
On Redfin: 82 days
HOA: $255
Down Payment: $85,780
Income Requirement: $123,000
Monthly Nut: $2,500
Description: Bay view condo on desirable Alamitos Bay. Floor to ceiling windows for enjoying the great water view. Upgraded designer kitchen. Potential to set sail from your own 32 foot boat slip. Beach & Marina at your front door. Walk to fine dining & shopping in Belmont Shore & Naples Island. Bike path for great biking. Pet friendly for up to 25 pounds.

Now, before you choke on your Cheerios at the asking price of $428,900 for less than 800 square feet, keep in mind that a slightly larger unit sold just last month for $430,000.

Also consider that this property apparently comes with its own boat slip. Of course, most individuals who pull in the required $123,000 per year and actually need a 32’ slip probably aren’t interested in living in a cramped one-bedroom apartment, but I digress.

I’m not a boat owner, but I would imagine that if you could rent the apartment out to someone for close to the monthly mortgage payment, it would be worth buying so you could have use of the slip.

What does a slip cost per month? Kaos? Anyone?

And is it even really included? The description says “potential to set sail from your own 32 foot boat slip.” Potential. What a curious word choice.

I mean, there’s potential for anything. There’s potential to shoot skeet from my balcony whilst wearing nothing but a miner's helmet, but that doesn’t mean a double-barrel and a stack of pigeons is included in the purchase price.

I’m operating under the assumption that the slip is actually included (even though the listing information doesn’t mention anything about the slip rights) and the word "potential" actually means "if you have a boat..." Otherwise that has got to be the dumbest goddamn marketing ploy known to man.

Anyhow, the location is amazing, the view is doesn’t get much better than this for single living. And although I have no idea what this joint looks like on the inside (doing a heckuva job, realtor!), the listing description mentions an upgraded kitchen. Might be a sweet little spot.

The only question is price. There's no way in holy hell this thing rents for $2,500 a month. Impossible.

And let's say a boatless buyer decides to buy it with the idea of living there and renting out the slip. From what I can tell, it only costs a few hundred bucks a month to rent a slip in Long Beach--not nearly enough income to offset that massive monthly nut. And not enough to justify a $542 per square foot asking price (however, I may be downplaying the value of that slip--I'll wait to hear from some of you boaters before I dismiss it).

It's worth noting that larger nearby apartments sans slips are selling for $100,000 to $200,000 less.

6232 North MARINA PACIFICA Dr Key 15
Sold on Dec 28, 2009 0.31 miles
1 bd / 1 ba
873 Sq. Ft.

6232 Marina Pacifica Dr N
Sold on Dec 29, 2009 0.31 miles
1 bd / 1 ba
873 Sq. Ft.

201 BAY SHORE Ave #207
Sold on Dec 03, 2009 0.36 miles
1 bd / 1 ba
879 Sq. Ft.

Sold on Jan 06, 2010 0.37 miles
0 bd / 1 ba
650 Sq. Ft.

5108 South MARINA PACIFICA Dr Key 20
Sold on Nov 13, 2009 0.41 miles
1 bd / 1 ba
873 Sq. Ft.

5211 South MARINA PACIFICA Dr Key 20
Sold on Sep 13, 2009 0.43 miles
1 bd / 1 ba
873 Sq. Ft.

Sold on Dec 22, 2009 0.46 miles
1 bd / 1 ba
873 Sq. Ft.

5898 East NAPLES Plz #101
Sold on Sep 18, 2009 0.46 miles
1 bd / 1 ba
703 Sq. Ft.

5959 East NAPLES Plz #104
Sold on Dec 01, 2009 0.58 miles
1 bd / 1 ba
810 Sq. Ft

Is it worth that kind of premium to have your own slip? Or would you be better off saving the $200,000 ($200,000!) and just renting a slip from someone else for a few hundo a month?

I think this price is way too high. Some might point to the aforementioned $430,000 comp as evidence this price is in the ballpark. However, why did that other unit sell quickly while this one has been rotting on the market since November with no interest?

Whatever the reason, it looks like it will need another price reduction to get buyers' attention. Unfortunately for this seller, he doesn’t have much room to reduce because at $428,900, he's already $9,100 below his 2005 purchase price.

Dec 21, 2009 - Price Reduced $428,900
Nov 21, 2009 - Listed $435,900
May 27, 2005 - Sold $438,000 (30.2%/yr)
Jul 01, 2003 - Sold $265,000 (4.1%/yr)
Jul 26, 2001 - Sold $245,000

Add in -$25,000 in commissions, and we're looking at a substantial loss (although, with five years of those bloated monthly payments, you have to imagine there's at least some equity to offset that).

But I want to focus on non-losers for a minute. Check out the profit margin the 2003-2005 owner enjoyed by selling to this sucker right before the peak! 30.2% per year?! Bond guru Bill Gross would put his left nut in a Salad Shooter for those kinds of returns. He cleared nearly $200,000 after less than two years of ownership.

Nice timing, and nicely done!

Sadly, our seller got stuck with the hot potato and is nervously hoping for a big Spring Bounce to save him from the inevitable. Maybe he'll get lucky in the next few months and the loss won't be that bad.

By the way, is anybody else noticing more 2005 purchases like this popping up? I have a sneaking suspicion, given the purchase dates, that many of these are Option ARMs exploding like seven-ton daisy cutters.


  1. I rent a slip for a 42 foot boat just down the way for $450.00 a month or about $10.70 a foot. I know this dock and the rent for that slip (if it even comes with the apartment would be 350.00 max. Not including sea wall tax.


  2. Morekaos,

    You're the best! I knew you'd come through.

    So, basically, with $350 per month in slip rent, if you wanted it to cashflow, you'd have to rent the apartment for at least $2,200 a month.

    The highest asking rent price I've seen is $1,695 in the 201 Bayshore building. And that larger unit has been on Craigslist for a while.

    Conclusion: This place is an absolute rip off.

  3. Shooting skeet off the balcony comment kinda threw me a little....... hehe

    Anyways, check this out:

    Might have some relevance to your last question, but I don't know, cause once you get into that advanced realtor lingo like "Option ARMs", I start looking up in the sky to see what flew over my head and am blinded by the sun.

  4. LOL. Not shooting skeet skeet skeet, just skeet shooting.

  5. I live walking distatnce from this apartment building, on the Island, in a 2br/2ba HOUSE, and I only pay $2000.00 a month. I cannot see asking anything more than 1100.00 for this box a month in rent.

  6. Well ever since that blog comment where you noted that something looked similar to the brothels in TJ, I've had my doubts about you El Bee. hahaha

    I know I know, it's what you HEARD about them! wink wink

    Just playing.

    But yeah, that comment kinda threw me, and at first I was like "whoa, El Bee is a wild child!". haha

    Hey handle your business player!

    Do what you gotta do!

    If you buy the balcony, it's your's to do with as you see fit. wink wink

  7. Well, I am single again, so you never know what I'll get into...