Sunday, September 12, 2010

Naples Nightmare: FINAL UPDATE

Sold on 09/09/10 - $1,200,000

To recap, after purchasing this property right after the peak of The Great Housing Bubble for $950,000, the former owner demolished the existing home and built this overwrought monstrosity with what I imagine was a hefty construction loan. Unfortunately, the minute ground was broken on this eyesore of a McCastle, the real estate market began its horrific, Great Depression-esque decline.

Stuck with an asset that was losing money before it was even completed, he spent the next eleven months sweating .50-caliber bullets, wishing that the housing market would somehow stop its rampant, freight-train powered return back to normalcy before he got his masterpiece on the market.

Wish in one hand, and crap in the other...and see which one fills up first. We all know how that worked out.

And so, in January of this year, after dicking around with extend-and-pretend short sale tactics, the bank finally foreclosed on his ass and took back the property for $1,260,000. And as is the case with quality properties in prime areas, the bank didn't take long to get it back on the market...with a wishing price of $1,325,000. There it sat for nearly seven months, until it apparently sold just a few days ago for $1,200,000 -- a mere 5% less than the bank paid.

Interestingly, $1,200,000 is HALF of what the deadbeat former owner asked when he initially tried to flip it.


My Place Is Special Syndrome (MYPISS), anyone?

Anyhow, the more I look at this thing, the more I hate it. Sure, the location is great, but who wants to live in the shadows of that monolithic apartment complex? Plus, there is no yard to speak of. Which, now that I think about it, you probably wouldn't even want a yard given the innumerable peering eyes in that apartment complex (ew, renters. We all know what perverts and degenerates they are).

But I mostly hate it because of what it represents: waste, misplaced priorities, bubble excess, poor lending standards, unchecked greed, bank bailouts, moral hazard...all of it.

The good news is that the new owners can start a life there and enjoy having an, um, interesting house in a great neighborhood. And regardless of how mud-fence ugly I think this thing is, you can't deny that $354 per square in this area for brand-new construction is a smoking deal.


215 South THE TOLEDO, 90803
Approved Short Sale Price: $1,450,000
Beds: 4
Baths: 4.25
Sq. Ft.: 3,345
$/Sq. Ft.: $433
Lot Size: 3,390 Sq. Ft.
Year Built: 2008
MLS#: P616675
Down Payment: $290,000 (assuming a bank would let you get away with "only" 20%)
Income Requirement: $363,000
Monthly Nut: $8,800
On Redfin: 718 days
Description: Short sale approved at list price. Can close qickly. Brand New Custom Home. This New Home has Big Walkin Closets In every bedroom on the second floor! Downstairs bedroom and bath can also be a maids Bedroom or office. Double door Formal entryway that leads into a huge Kitchen with upgrades and a great room with its own half Bathroom. Oversized Attached Garage. Curved Stairway that Leads you to Laundry room and second floor with Master bedroom that has two walkin closets, Fireplace, Master bathroom and private balcony. Second Floor hall way leads to two more Bedrooms, each with walkin closets and private baths. Private Door leads to the third story deck that has water, electricity for all your entertainment needs. Advanced Electrical for Entertainment systems, speakers, Lighting, Vacuum System, Security, Internet, Dual Air . Plenty of Storage through-out Home. Too many upgrades to list all.


"Walkin" closets? Where they walkin' to?

And Nice (Ab)use of Title Case, Dickhead.

It's been a rough few years for this fliptard. His simple plan was to tear down the old property, build a McMansion in its place, and flip it for a sizeable profit.

Unfortunately, his timing was absolutely horrendous.

You see, he paid $950,000 in January 2007, juuuuuuust past the peak of the housing bubble. The year he spent constructing this 3,345 square foot behemoth (on a freaking 3,390 square foot lot! What?!) saw the beginnings of one of the worst economic catastrophes in world history.

As quickly as he could, and before the economy got any worse, he put it on the market. Unfortunately, 2008 was the year of the credit crisis. His initial asking price of $2,700,000 might have seemed high even during the height of the bubble, but in the context of a full-blown economic disaster 2.7 mil was laughed off dismissively by market participants. And it's been a race against the clock ever since:

Dec 03, 2009 - Price Changed $1,450,000
Nov 27, 2009 - Price Changed $1,799,000
Oct 08, 2009 - Price Changed $1,900,000
Aug 06, 2008 - Price Changed $2,199,000
Apr 09, 2008 - Price Changed $2,399,000
Jan 09, 2008 - Listed $2,700,000
Jan 02, 2007 - Sold $950,000

Considering it's a short sale at $1,450,000, I'd say the clock won.

You have to appreciate his complete ignorance to market realities during the ensuing 718 days. Specifically, the 14 months between August 2008 and October 2009 that saw no price reductions. Smart! You're really good at this!

Given that insane amount of time spent being totally uncompetitive, I have a feeling 1.9 mil was the breaking point at which a short sale could be avoided. And it's been a sad race to the bottom ever since.

Honestly, I think the approved price of $1,450,000 is about right. This is BRAND NEW construction and has never been lived in. The upgrades look great and the Naples location is fantastic (although it appears to be right next to a massive apartment complex). Plus, most people buying these properties don't really expect to have a yard anyway.

Given all of that, along with a quick glance at the listed and sold comps (typical for Naples is between $541 and $671 per square foot), $443 per square for a brand spanking new build actually seems like a good deal.

So what gives?

Who knows. Fear of further drops in the high-end? Jumbo financing snags? Pain in the ass short sale process? Fear Of Unnecessary Title Case?

Or maybe Santa brought someone escrow paperwork for Christmas and it will go pending within days.

Regardless, I can't believe the "owner" has stuck around this long to find out. After three years of carrying costs on that $950,000 purchase loan plus AT LEAST $500,000 in construction loans, I figured he would have tapped out by now and moonwalked away.

But he didn't. Because we all know debtors walking away from their obligations is "immoral."


  1. Jan 09, 2008 - Listed $2,700,000

    so $1,200,00 is actually even less than half the original list price ...

  2. Ewwwww and it's on an alley. NFW!