1363 Morningside Drive, Laguna Beach

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wprickett_IHB

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Does anyone know much about this house? 1363 Morningside Dr, Laguna Beach (Other than it is next to the infamous Bluebird Canyon) It looks like the previous owners spent a lot in structure reinforcement. It still needs a lot of work however. Will lenders loan money on a property like this or will it probably need to be a cash buyer? I spoke with the agent and she said something regarding $80k in penalties, etc that will have to be paid because the retaining wall was improperly installed and is partially on the neighbors property. The MLS id is: S574676. Just curious if there are any thoughts or insight. Thanks.
 
[quote author="wardp" date=1243857794]Does anyone know much about this house? 1363 Morningside Dr, Laguna Beach (Other than it is next to the infamous Bluebird Canyon) It looks like the previous owners spent a lot in structure reinforcement. It still needs a lot of work however. Will lenders loan money on a property like this or will it probably need to be a cash buyer? I spoke with the agent and she said something regarding $80k in penalties, etc that will have to be paid because the retaining wall was improperly installed and is partially on the neighbors property. The MLS id is: S574676. Just curious if there are any thoughts or insight. Thanks.</blockquote>
The property was purchased by the previous owner on 2/7/01 for $400,000 (currently owned by JP Morgan). The proceeded to extract equity at well. Before the property was foreclosed on 9/9/08 by JP Morgan for $929,685, the previous owner had a first mortgage of $885,000 from JP Morgan obtained on 8/16/05, a second mortgage of $298,000 from Countrywide obtained on 10/21/05, and a third mortgage from Beneficial CA of $47,367 from obtained on 2/27/06. A bank will only finance the property if it has a certificate of occupancy.
 
[quote author="usctrojanman29" date=1243861122][quote author="wardp" date=1243857794]Does anyone know much about this house? 1363 Morningside Dr, Laguna Beach (Other than it is next to the infamous Bluebird Canyon) It looks like the previous owners spent a lot in structure reinforcement. It still needs a lot of work however. <strong>Will lenders loan money on a property like this or will it probably need to be a cash buyer?</strong> I spoke with the agent and she said something regarding $80k in penalties, etc that will have to be paid because the retaining wall was improperly installed and is partially on the neighbors property. The MLS id is: S574676. Just curious if there are any thoughts or insight. Thanks.</blockquote>
The property was purchased by the previous owner on 2/7/01 for $400,000 (currently owned by JP Morgan). The proceeded to extract equity at well. Before the property was foreclosed on 9/9/08 by JP Morgan for $929,685, the previous owner had a first mortgage of $885,000 from JP Morgan obtained on 8/16/05, a second mortgage of $298,000 from Countrywide obtained on 10/21/05, and a third mortgage from Beneficial CA of $47,367 from obtained on 2/27/06. <strong>A bank will only finance the property if it has a certificate of occupancy.</strong></blockquote>


You can't get a loan on a place that is not structurally complete. It is either cash, or cash, no loans for homes with missing drywall and doors.



http://media.cdn-redfin.com/photo/46/bigphoto/676/S574676_10_0.jpg
 
Could someone get a "construction loan" on this once they bought it for cash? It seems like have heard that raw land can be bought with a loan up to about 50% of the purchase price, and then it is possile to get a construction loan to use while you build the house. It seems like there would have to be some value there that a lender would loan against, but I could be wrong!
 
I thought a lender might balk at giving a loan on it because of its location. (landslide prone) Any lenders out there want to chime in?
 
Big down payment - 25 / 30 pct and a construction loan will work. Check with the City of Laguna Beach first for permit expirations, etc. I'm also sure there are title liens of significance. It's also possible, again with a huge down payment, to get a 203k FHA Rehab loan. Herb Moses at Wells Fargo (google him) is a pro with construction loans. Strong recommendation.



As for landslides, I grew up in that very neighborhood. The PIQ is nowhere near the slide area. You'll be fine.



My 02c



Soylent Green Is People.
 
I found it interesting that <a href="http://www.zillow.com/homedetails/1323-Morningside-Dr-Laguna-Beach-CA-92651/25559018_zpid/">1323 Morningside</a> got foreclosed on yesterday for $1.188mil, and from the Zillow shots... it looks incomplete as well. Oh... and the NTS was nearly $2.5mil.
 
[quote author="wardp" date=1243857794] I spoke with the agent and she said something regarding $80k in penalties, etc that will have to be paid because the retaining wall was improperly installed and is partially on the neighbors property. </blockquote>


If a retaining wall has been built on a neighbor's property, I would not buy the home unless I was willing to pay to have the retaining wall moved. There is no "penalty" assessed for encroachment on another's private property. The encroaching improvement must either be moved or the property must be purchased and lot lines adjusted or an easement purchased and new deeds produced to reflect the easement. It is all very expensive and the neighbor can pretty much charge whatever they want for their property.
 
I just emailed the agent on this property and she said, "It is over, done & sold, thanks." I emailed her back to ask what it sold for but haven't heard a reply. Does anyone know?
 
[quote author="wardp" date=1245452656]I just emailed the agent on this property and she said, "It is over, done & sold, thanks." I emailed her back to ask what it sold for but haven't heard a reply. Does anyone know?</blockquote>


Um... still says it is active. Either the agent hasn't updated the MLS or they are a liar.
 
[quote author="graphrix" date=1245457355][quote author="wardp" date=1245452656]I just emailed the agent on this property and she said, "It is over, done & sold, thanks." I emailed her back to ask what it sold for but haven't heard a reply. Does anyone know?</blockquote>


Um... still says it is active. Either the agent hasn't updated the MLS or they are a liar.</blockquote>
Or choice C) They are an idiot.
 
This house is back on the market. Supposedly the people who were going to buy it came in with a "cash" offer but then were rejected by the bank when they had to get financing. Surely someone in Laguna knows more about this property. Anyone?
 
[quote author="wardp" date=1255149106]This house is back on the market. Supposedly the people who were going to buy it came in with a "cash" offer but then were rejected by the bank when they had to get financing. Surely someone in Laguna knows more about this property. Anyone?</blockquote>


Have you been down to city hall? There are supposedly docs on file there that will answer many questions, although I don't know if there's a geo report on file there or not. I do know that the termites have had a go at the place, no idea how far they got. The property next to 1363 came on the market a couple days ago, I think that property is the one that owns the land that 1363 uses for access.
 
[quote author="Soylent Green Is People" date=1244070007]



As for landslides, I grew up in that very neighborhood. The PIQ is nowhere near the slide area. You'll be fine.



My 02c



Soylent Green Is People.</blockquote>


Maybe it's not near the landslide area, but this house definitely has some slope problems. I checked the records at the LB city hall. This house had a surficial failure along the southeast slope in 1995, 1998, and again in 2005. I'm not the best at reading these records, but it looked like $140,000 worth of repair work was performed initially, and another $80,000 performed after the 2005 landslides. The sewer line was damaged on two of these occasions, but the other utility pipes were o.k. Even after the 2005 repairs, the engineer stated that occupancy should not be permitted in the SE lower level bedroom because repairs to the slab that was undermined by the landslide had not been completed. Nothing indicating that the repair work was ever completed.



I didn't see anything about a fine, but there were several City Code Enforcement letters over the course of several years stating that the repair work was not up to code, and if it was not fixed they would refer the case for prosecution. The last letter was in late 2008. The retainer wall is indeed partially on a neighbor's property, but there was no indication whether the neighbor was pursuing any remedies.



Lastly, an investigation concluded that the "slope has a low overall gross factor of safety." A casion-tieback system was installed, but no indication of completion or effectiveness.



The house is basically a shell at this point. Cheap price by LB standards, but you'd be buying yourself a lot of work and a lot of headaches.
 
All of Rancho Laguna is a slide area, some worse than others. There's a big church property out there that's inching closer to the ocean each month. Don't know if you can stop any of this from happening, but it's not quite the landslide prone area that was near Oreole/Bluebird Canyon that slid a few years ago. I was there when the first slide happend and walked the neighborhood a day or so after to help clear out houses. A surreal experience.



My .02c



SGIP
 
An ugly house you can sleep well at night but a bad lot you can lose sleep every night. It is like having cancer not knowing the future.
 
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