Monday, July 19, 2010

Well, It Was Worth a Shot: UPDATE II

The price was "$279,000" and changed to "$269,000"

I've been seeing $10,000 price reductions ALL OVER THE PLACE since the Federal tax-credit expired, and all it really tells us is that the free government ponies make housing that much more expensive.

I'll remind you, this flopped flip first arrived on the market in March with a wishing price of $339,000. And since then he's been gingerly chasing the market down, perpetually 10 steps behind the curve. Thus far his lackadaisical pricing strategy has resulted in being forced to cut 60 Grand from the original ask -- all to no avail.

And now that the tax credits are history, you have to wonder how much more cold, hard cash his ridiculous strategy will cost him.

Factoring in commissions, he is looking at a profit of $28,000 for this exercise in futility. A pittance compared to what he could have walked away with, but at least it's not a loss, right?

Oh, but we forgot to factor in the ~$10,000 spent sprucing it up and the last eight months of carrying costs. If this fliptard doesn't get real -- and real soon -- it's gonna get real ugly.

The end of The Super Summer Selling Season(tm) is coming up quicker than you think, pal...


On March 30th I said, "Hey, Flippy, Price Reduction's on line #2. Says it's urgent."

Well, the capitulation has begun in earnest:

May 10, 2010 - Price Changed $309,000
Apr 28, 2010 - Price Changed $319,000
Apr 12, 2010 - Price Changed $325,000
Mar 27, 2010 - Listed $339,000

Those dreams of stacking flipper cash are quickly disappearing like a parakeet fart in Tornado Alley.

And check out this updated description:

Agents Owner Financing available with 20% down 8% rate for 30 or 40 years due in 5. Easy qualifying on credit and income. No appraisal needed or tax returns fast approval no hassles or time delays. Corner-front Condo unit with city views and cool ocean breeze. Two bedroom and two baths newly remodeled. Convenient location close to beach, parks, public transportation, Belmont Shores [SIC] and Shoreline Village. On site laundry facility with 1 car underground parking. Granite, new appliances, carpet and building security with plenty of storage space in unit. Private balcony off of living room. No pets allowed unless buyer has doctor instructions for medical reasons.

First of all, can someone translate those first two sentences for me? You can get financing through the flipper's agent? And despite 20% down you still have to pay an 8% interest rate? And the principal is due in five years? The way it's worded is a complete mess.

And the whole "No appraisal needed or tax returns fast approval" thing makes it sound shady as hell. The only people who care about that stuff are deadbeats with suspicious money issues. And the fact that this flipper is catering to those types makes you wonder about this neighborhood.

And who the fuck wants to buy a place in a declining market WITH NO APPRAISAL?!

That last line is a head-scratcher too. What "medical reason," other than blindness, could someone have that would require them to have a pet? And what about the fellow residents who may have medical reasons to NOT want pets around? So weird.

Whatever. This flipper is in deep shit if he doesn't get his act together soon. I can't wait to see how much he slashes the price next month! Stay tuned.

P.S. If you were stupid enough to buy in March, you would already be $30,000 underwater on your purchase. Good thing you read this blog!


Not sure if you remember this dump from October 2009, but it turns out just a month after my post a flipper swooped it up from the bank for $225,000 (the lender ate a $200,000 loss on that one).

As crusty as it was, $225,000 was a pretty good deal (in October I said I thought $250,000 penciled out). And like most sales so close to downtown, it represents a 2002 price.

Anyhow, this flipper, instead of taking a shitty property, sprucing it up, and extracting a reasonable profit, has turned out to be just another gluttonous pig with his greedy, money-grubbing snout buried deep in the quick-money trough.

After slapping on some paint, pergo floors, and cheap carpeting, he dumped it on the market with a $114,000 built-in profit.


What a jackass.

Let's laundry, only one parking spot, and located all the way the hell down on Esperanza? For $339,000?!

The average price per square foot in this neighborhood is $274 and he's asking $355?

What the fuck for? Fake wood floors and repainted cabinets (oh, you didn't think we'd notice that)?

And he might have just painted over the pink tiles!

Other than money spots on Ocean, nearby properties don't even come close to asking this kind of money. What a dolt.

Look, I'm cool with flippers improving rough properties (and, in some cases, improving the neighborhood as a result) and making a little dough. Hell, in this environment you gotta have a set of dangling bowling balls to try your hand at flipping, and you should be rewarded for the risk you're taking. As far as I'm concerned, party on Wayne.

But what I can't get over is the utter contempt some of these flippers have for potential buyers. I mean, he truly believes you and I are complete rubes and that he deserves $100,000+ for doing little more than putting lipstick on a warthog.

Hey, Flippy, Price Reduction's on line #2. Says it's urgent.


I'm back from Chicago, and let me tell you, there aren't many better cities to celebrate your birthday. And speaking of cities with a condo problem:

1329 E 1st St #18, 90802
Price: $250,000
Beds: 2
Baths: 2
Sq. Ft.: 954
$/Sq. Ft.: $262
Year Built: 1959
MLS#: T09106531
On Redfin: 5 days
HOA: $150
Down Payment: $50,000
Income Requirement: $71,000
Monthly Nut: $1,500
Description: 2 bedroom, 2 bathroom front, corner unit condo in the Startdust Condo Building with city lights view from private balcony and master bedroom and view of the ocean from the rooftop deck. Located in gated community with underground parking and only 1 block from the beach. Unit has a lot of closet and storage space. Conveniet location. Close to park, shopping, public transportation, downtown Long Beach, Belmont Shore, Shoreline Village and the Pike Center.


It appears the bank took this puppy back in February of 2008 for $375,000. The play seemed to be, "Bubble pricing will be back in no time...let's just wait this out. It can't possibly go any lower!"

Well, they successfully kept it off the market for ONE AND A HALF YEARS (Anybody still believe shadow inventory doesn't exist? Really?) before throwing it on the MLS for--take a wild guess!--$375,000.

I guess it was worth a shot, eh?

Because yesterday (just four days after relisting at that hilarious wishing price) the price was dropped a mind-blowing -$125,000. Ploy to garner a bidding war? Typo? Or the result of actually looking at comps and accepting reality?

Who knows, but that is one hell of a price cut. Check this out this history:

Oct 06, 2009 - Price Changed $250,000
Oct 02, 2009 - Listed $375,000
Feb 22, 2008 - Sold $375,000
Nov 04, 2007 - Delisted
Sep 30, 2007 - Listed
Mar 09, 2006 - Sold $418,000
Sep 27, 2002 - Sold $227,500
May 08, 1990 - Sold $132,500
Apr 19, 1989 - Sold $120,000

Yep, this is a 2002 price! And it's still no guarantee of selling in this market. Because regardless of that aggressive pricing, there is no escaping how dumptastic this place is:

Good grief, Charlie Brown, what a crap shack.

BUT, it's approaching rental parity, so this might be a decent buy.

Think about it: Get an FHA loan, use the (coming) $15,000 homebuyer tax credit for your down payment, and when you fall deep underwater, stop paying and live rent-free for a while, and just walk away with a wad of saved cash and a dinged credit score when they finally kick you out. If anybody gives you static about your FICO, just tell them, "Hey man, it was 2010."

Believe me, everyone will understand.

1 comment:

  1. Why anyone would spend over 200K on a condo like this is beyond me. It's ugly, it's boring, and it's depressing, there's going to be an HOA fine for nothing gained, and the parking situation is horrific.

    The ONE good thing it has going is that it's close proximity to the beach, but as we've all said numerous times, this is Long Beach, and it's just not that great to be "close to the beach" here.

    And am I the only one that finds it depressing to be in the midst of all these multi-unit dwellings? Taking a look down the street view of the map is an instant deal-breaker.

    Am I missing something?