Address:
7131 E Mezzanine Way, 90808Asking Price: $645,000
Year Built: 1953
Size: 3 beds, 2 baths, 1,130 sq. ft.
$/Sq. Ft.:
$571Purchase price: $599,000
Purchase date: 4/2007
MLS#: P686990
On Redfin: 8 days
Down Payment: $129,000
Monthly Payment: $3,400
Income Requirement: $184,000
Description: This immaculate, authentic Cliff May Rancho has been extensively refurbished by its owners, and represents the bright, open, indoor-outdoor lifestyle that Cliff May intended in his residential designs. The numerous upgrades to this home include: a custom kitchen with hand built birch cabinetry, full extension glide drawers, and GE profile appliances; new birch paneling throughout the interior and new interior birch doors, all built to original specs; remodeled bathrooms with stainless steel fixtures; an upgraded electrical system with 200 amp panel; and, newer furnace and water heater. This home sits in a quiet interior location within the tract, set back from the street for privacy and serenity. The entire neighborhood is bordered by beautiful El Dorado Park and Nature Center, which has 800 acres of fields, streams, lakes and paths.
DAAAAAAAAAAAAAMN! This Cliff May house is freakin' awesome. I love it!
They did such an amazing job of staging it, I would be tempted to buy it fully furnished. Sure, this house is tiny (I mean, how do you even cram three bedrooms into 1100 square feet? By the way, in laptop computer technology, "mezzanine" means "a sheet of plastic insulating different parts of circuitry from each other
in cramped environments.") but overall I'm impressed with the house, the great listing description, and the photos (although that Thunderbird is an early 60s model and misaligned with the 50s theme of the house but I still give them an "A" for effort).
This flipper purchased in April 2007 for $599,000, which, frankly, is completely insane. But he saw potential for massive profits and with dollar signs shooting out of his retinas, he made his move. He obviously put a lot of money, time, and effort into tastefully updating the home while staying consistent with the Cliff May design themes. Unfortunately, he picked the worst possible time to sell.
You see, even if he was able to find a knife-catcher willing to pay this absurd asking price of
$645,000, commissions alone would eat up $38,700, leaving a meager profit of
$6,300 for his troubles. The only way this guy is walking away with any profit whatsoever is if the upgrades cost less than $6,300.
I guess he saved a few bucks by choosing cheap floors and hideous blue formica countertops (WTF?) for the kitchen...
...but still, I'm guessing these improvements, updates, and furniture set him back
at least $60 grand.
That means, if a buyer decides to pay full asking price of $645k (the second most expensive house in the Ranchos by $5,000), the loss to the flipper will be at least
-$92,000.
Brutal.
Worse yet, that doesn't include the carrying costs for two years of ownership, which would run about
-$67,000. And that's
after the tax benefit!
Ultimately, the total out-of-pocket cost of following his
Flip This House-inspired dreams of real estate riches will likely be
-$159,000.
Ouch.
Those losses, of course, assume this flipper can find a knife-catcher foolish enough to shell out for this stylish, but cramped and overpriced homestead. Not going to happen.
And here's why. First, although we have seen a wide discrepancy in Long Beach between the asking per square foot price versus the ppsft homes actually sell for, in 90808 that's not the case:
It's pretty clear that most homes in 90808 are listing, and selling, for $340 per square on average. This dude is trying to unload for
$571 per square for one of the smallest Cliff May models. Yeah, good luck with that.
Second,
this nearby seller's Cliff May house is arguably just as nice as 7131 Mezzanine (seriously, take out the modern/retro furniture and they're pretty similar) and has 200 extra square feet, an extra bedroom, and nice hardwood floors.
And the Kallin house, rotting on the market for 108 days,
is asking $30,000 less! In other words, the Mezzanine flipper is in deep shit if he doesn't start pricing competitively. Like, yesterday.
When property values inevitably come down to earth and align with local incomes (a healthy $82,431 in this zip), I would be all over a house like this, as small as it is. Until then, the longer this guy waits to lower the price, the more crushing the monthly carrying costs will be, and the further into the hole he will go on this well-executed, but poorly timed, flip.
Hat tip to Carl
