Los Caballeros condominiums selling call options in a declining market

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Shadax_IHB

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I did a few searches looking for this development and came up empty. I've been watching it since before they broke ground. <a href="http://www.loscabwest.com">LosCabWest</a> is a building with 40-50 units in my old stomping ground, Fountain Valley. IMO, they priced them far too high. The market agreed and they had sold less than half of the units. I'm sure it slowed to a crawl lately. Now, in lieu of REAL market pricing, the owner is looking to carry the units. However, he's cooked up a new scheme (not NEW, but new to this dev) in order to not only make up his carrying costs, but insulate himself against future losses in value as well. He's basically set himself up to sell call options on the remaining units. The full description of the scam---oops, opportunity... Is <a href="http://www.fvhome.com">here</a>. On an advertisement in front of the building, it says "If during the 3 years prices go up, you have instant equity! If prices go down, you can cancel and retain part of your 'down payment'!"



IMO it is rather transparently shifting risk to people who largely have no idea what they're doing. I'm all for everyone being an informed consumer, "caveat emptor", etc., but it just seems shady because in reality, they aren't offering you much. I mean, subprime mortgage companies are being dogged constantly for selling these exotic loan products to people who had no idea what they were signing, etc. This is the first whiff I've had of this kind of tactic in our current cycle. Has anyone seen any other new OC developments trying this?
 
Hi, long time lurker, first time poster here.





Glad to see someone posting about Los Caballeros! I lived there as a renter for 2 years. Since then have moved on and would not recommend Los Caballeros for anyone considering a condo purchase.



Everything about Los Caballeros is mediocre and dated. The place reminds me of some of the early 70s buildings up in LA, that were built and are then sort of left to rot. Maybe a coat of paint every 10 years, but that's about it.



When you mentioned Los Cab West was at 50% sold, I think that's actually extremely optimistic. Every time I looked in the parking lot, there was literally 1-3 cars in the parking garage and the outside lot. That's not even an exaggeration -- I could always count the number of cars on one hand. The location of this development is terrible. It's a real long and thin building that is literally crammed into an existing parking lot. There are no green spaces. Many of the units have a balcony that faces the...parking lot of the small business center there. If you like the smell of fresh tar, then this must be the place for you! For only 300K to start.



The new Los Caballeros developments scream bubble greed. There was another new development that opened in 2007, with fantastic view of the... parking lot in the front, and a... concrete storm drain system in the back. (The type of artificial river they show car chases on in movies. Do a Google image search on "LA river" and that will show what it looks like). Only starting at a bargain price of 350K! None of that included the standard cookie cutter bubble amenities (granite, stainless), and the exterior was a Frankenstein of the Tuscan look combined with a warehouse, and then topped off with these really strange pair of columns straddling the front entrance. The whole thing looks slapped together in a hurry.



They couldn't sell all of the 2007 units, so someone ended up buying about 15 of the units and turning them into rentals. But they aren't marketed that way. The brochure exclaimed, "last summer our other new development (Club 42) sold out quickly!" (Which is false, they could not sell them all, and after sitting on the market forever, someone -- maybe the developer himself -- bought the remaining units up).



On top of that, the sports club is marketed as some cutting edge, world-class sports center. This may have been the case 25 years ago, but the club has fallen behind the times. It's still a decent club, but world class? No way. Several tennis courts were removed (to make way for the new condos), the weight room had most of its best equipment removed and was downsized to about 50% of what it was, and the remaining facilities are showing their age.



This might be a nice second home for doctors who work at the two big hospitals in Fountain Valley, and might need a place to crash after a really long shift or pager duty, but for a primary home, it's very mediocre, and completely overpriced. It feels like living in a hotel. The original poster is right, there is shady stuff going on here, and the developer is just in for a quick buck. Another poster child of the housing bubble gone wrong.



If anyone has any questions about Los Caballeros let me know.
 
Yes sir, you are quite correct on this. They clearly misstate the sellthrough on their developments. Since I posted they have provided a more detailed breakdown of who has bought, etc. It seems that "FV Rentals" has bought several units there (The owner selling it to himself?). There are only 5 owner-occupied units. Haha. Crash and burn. The page is here:



<a href="http://www.loscabwest.com/c47-pricing/c47-pricing.htm">http://www.loscabwest.com/c47-pricing/c47-pricing.htm</a>
 
I'm another poster just like the 2nd. Been lurking the forums gathering information about the areas I'm potentially looking at moving into (renting). August marks my 2nd year renting at Los Cab in two different units, one owned by Wallace (f***k that asshole, he's the biggest bitch I've encountered in my young years), one privately owned.



I also would NOT reccomend Los Cab for a condo purchase, especially not the Phase I, II, or III, which are the OLD ass apartments. I honestly can't speak for the new ones, as although I've seen them from the outside, I don't know what it's like to live at any of the new construction.



In regards to someone buying 15 of the units and turning them into rentals, I wouldn't be surprised if Wallace himself did that.



Feel free to ask me about living there, while it hasn't been a nightmare (except for living in the 500 sq foot 3rd floor studio) that gets to be over 83 degrees in NOVEMBER - JANUARY IN THE WINTER, it's certainly somewhere I'd never want to own a home at.







[quote author="icey" date=1228079697]Hi, long time lurker, first time poster here.





Glad to see someone posting about Los Caballeros! I lived there as a renter for 2 years. Since then have moved on and would not recommend Los Caballeros for anyone considering a condo purchase.



Everything about Los Caballeros is mediocre and dated. The place reminds me of some of the early 70s buildings up in LA, that were built and are then sort of left to rot. Maybe a coat of paint every 10 years, but that's about it.



When you mentioned Los Cab West was at 50% sold, I think that's actually extremely optimistic. Every time I looked in the parking lot, there was literally 1-3 cars in the parking garage and the outside lot. That's not even an exaggeration -- I could always count the number of cars on one hand. The location of this development is terrible. It's a real long and thin building that is literally crammed into an existing parking lot. There are no green spaces. Many of the units have a balcony that faces the...parking lot of the small business center there. If you like the smell of fresh tar, then this must be the place for you! For only 300K to start.



The new Los Caballeros developments scream bubble greed. There was another new development that opened in 2007, with fantastic view of the... parking lot in the front, and a... concrete storm drain system in the back. (The type of artificial river they show car chases on in movies. Do a Google image search on "LA river" and that will show what it looks like). Only starting at a bargain price of 350K! None of that included the standard cookie cutter bubble amenities (granite, stainless), and the exterior was a Frankenstein of the Tuscan look combined with a warehouse, and then topped off with these really strange pair of columns straddling the front entrance. The whole thing looks slapped together in a hurry.



They couldn't sell all of the 2007 units, so someone ended up buying about 15 of the units and turning them into rentals. But they aren't marketed that way. The brochure exclaimed, "last summer our other new development (Club 42) sold out quickly!" (Which is false, they could not sell them all, and after sitting on the market forever, someone -- maybe the developer himself -- bought the remaining units up).



On top of that, the sports club is marketed as some cutting edge, world-class sports center. This may have been the case 25 years ago, but the club has fallen behind the times. It's still a decent club, but world class? No way. Several tennis courts were removed (to make way for the new condos), the weight room had most of its best equipment removed and was downsized to about 50% of what it was, and the remaining facilities are showing their age.



This might be a nice second home for doctors who work at the two big hospitals in Fountain Valley, and might need a place to crash after a really long shift or pager duty, but for a primary home, it's very mediocre, and completely overpriced. It feels like living in a hotel. The original poster is right, there is shady stuff going on here, and the developer is just in for a quick buck. Another poster child of the housing bubble gone wrong.



If anyone has any questions about Los Caballeros let me know.</blockquote>
 
For two years, while living in FV, I passed these condos every day on my way to and from the freeway. Every time I saw one of those people spinning the "NEW CONDOS!" signs at the light by the post office, I would think to myself how horrible the location was.



What do you think about the house on that huge corner lot at the intersection of Warner and Newhope? I used to drool over that yard daily and more than once had to slam on my brakes due to my rubber neck.
 
Sorry to hear about your troubles at this place, I can definitely empathize. I'd love to hear stories!



The desk staff there can be quite rude. They are arrogant act like you're bothering them just for basic things. And the HEAT you mentioned, gets insane, it's like every unit's heat just adds up to make a giant oven. They have air conditioners in the units, but supposedly they won't fix them because they can no longer get parts for the units. Those air conditioners look older than the building itself, like from the 70s. How hard is it to just buy a new air conditioner? Something's pretty fishy about that.



Then there was the regular Sunday night hookers/strippers always using the bathrooms next to the laundry room at midnight. The same laundry room that flooded a couple of times. Or the older lady who just walked around outside in her underwear and no shoes all night as though she was drugged up. I felt bad for whoever had the units next to the complex doors, cause those things had a LOUD slam if you forgot to close them slowly.



Did your studio have one of those divider doors between it and the room next door, you know like hotel suites do?



I've lived in a few apartments over the years, some in older LA neighborhoods, where you would have thought the places to be unsafe and unruly, but this place hands down was the worst.



[quote author="Flowerbridge" date=1247202861]I'm another poster just like the 2nd. Been lurking the forums gathering information about the areas I'm potentially looking at moving into (renting). August marks my 2nd year renting at Los Cab in two different units, one owned by Wallace (f***k that asshole, he's the biggest bitch I've encountered in my young years), one privately owned.



I also would NOT reccomend Los Cab for a condo purchase, especially not the Phase I, II, or III, which are the OLD ass apartments. I honestly can't speak for the new ones, as although I've seen them from the outside, I don't know what it's like to live at any of the new construction.



In regards to someone buying 15 of the units and turning them into rentals, I wouldn't be surprised if Wallace himself did that.



Feel free to ask me about living there, while it hasn't been a nightmare (except for living in the 500 sq foot 3rd floor studio) that gets to be over 83 degrees in NOVEMBER - JANUARY IN THE WINTER, it's certainly somewhere I'd never want to own a home at.



</blockquote>
 
In regards to the desk staff, I forgot about how my gf and I were lied to about the $75 "deposit" for the extra gate/pool key. When they changed the gate key over to an electronic fob, the leasing staff said the association decided not to refund people for their extra keys. There was no mention in my lease of it being a "deposit" so I was basically screwed.



Both units I lived in had working AC, it did take a lot of electricity though.



No, my studio wasn't like that, here's how the set up went.



Also, if you live in the 3 floor units which are converted into duplexes, with a 1000sq ft unit on the first 2 floors and a 550 sq ft unit on the 3rd floor, the air conditioning is SHARED. It?s the most retarded thing ever because its insanely hot on the 3rd floor, but supposedly, its freezing for those downstairs.



I can?t quite say I ever saw any of those hookers, but the place did clean up a little when the electronic gate keys were installed. We used to see white kids and Mexicans who obviously didn?t live there just come in with a key and use the pool and Jacuzzi, but the random miscreants have calmed down. My (now ex)gf was a fulltime student, home most of the day, witnessed two drug busts, but its not as ghetto as Coronado in Newport.



Again, my experiences are of those living in phases 1-3, so the others may not be as bad, but either way, I'd never purchase from the clowns that developed this.





[quote author="icey" date=1247573820]Sorry to hear about your troubles at this place, I can definitely empathize. I'd love to hear stories!



The desk staff there can be quite rude. They are arrogant act like you're bothering them just for basic things. And the HEAT you mentioned, gets insane, it's like every unit's heat just adds up to make a giant oven. They have air conditioners in the units, but supposedly they won't fix them because they can no longer get parts for the units. Those air conditioners look older than the building itself, like from the 70s. How hard is it to just buy a new air conditioner? Something's pretty fishy about that.



Then there was the regular Sunday night hookers/strippers always using the bathrooms next to the laundry room at midnight. The same laundry room that flooded a couple of times. Or the older lady who just walked around outside in her underwear and no shoes all night as though she was drugged up. I felt bad for whoever had the units next to the complex doors, cause those things had a LOUD slam if you forgot to close them slowly.



Did your studio have one of those divider doors between it and the room next door, you know like hotel suites do?



I've lived in a few apartments over the years, some in older LA neighborhoods, where you would have thought the places to be unsafe and unruly, but this place hands down was the worst.



[quote author="Flowerbridge" date=1247202861]I'm another poster just like the 2nd. Been lurking the forums gathering information about the areas I'm potentially looking at moving into (renting). August marks my 2nd year renting at Los Cab in two different units, one owned by Wallace (f***k that asshole, he's the biggest bitch I've encountered in my young years), one privately owned.



I also would NOT reccomend Los Cab for a condo purchase, especially not the Phase I, II, or III, which are the OLD ass apartments. I honestly can't speak for the new ones, as although I've seen them from the outside, I don't know what it's like to live at any of the new construction.



In regards to someone buying 15 of the units and turning them into rentals, I wouldn't be surprised if Wallace himself did that.



Feel free to ask me about living there, while it hasn't been a nightmare (except for living in the 500 sq foot 3rd floor studio) that gets to be over 83 degrees in NOVEMBER - JANUARY IN THE WINTER, it's certainly somewhere I'd never want to own a home at.



</blockquote></blockquote>
 
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