So I went to an open house today...

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traceimage_IHB

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10 Aberdeen, in Northwood. Apparently it was a foreclosure that sold for $625k in May. It came back on the market yesterday at $779,990. It's been all renovated and looks pretty nice (although a little over the top for my taste). We were there for maybe 15 minutes, and we probably saw 5 different groups of people (all Asian) come to take a look at the house. While we were there, we overheard someone asking the owners (who were there) if they buy foreclosures and then flip them, and they said yes. So anyway, I just checked on Redfin, and the house is already in backup offers! I was kind of hoping the house wouldn't sell, because the flipper owners looked so smug and annoying, but it sold in a day! Unbelievable. Must be nice to earn $150k in a month...less renovation expenses, of course.
 
traceimage said:
10 Aberdeen, in Northwood. Apparently it was a foreclosure that sold for $625k in May. It came back on the market yesterday at $779,990. It's been all renovated and looks pretty nice (although a little over the top for my taste). We were there for maybe 15 minutes, and we probably saw 5 different groups of people (all Asian) come to take a look at the house. While we were there, we overheard someone asking the owners (who were there) if they buy foreclosures and then flip them, and they said yes. So anyway, I just checked on Redfin, and the house is already in backup offers! I was kind of hoping the house wouldn't sell, because the flipper owners looked so smug and annoying, but it sold in a day! Unbelievable. Must be nice to earn $150k in a month...less renovation expenses, of course.
Click to expand...

I'll believe it when it actually closes. The way the Jumbo market has frozen with high rates and angelic supporting data, plus lets wait for the appraisal that has been killing deals left and right i think these flippers may be selling this home many times before they cut their losses and dump it at a loss...
 
OCCOBRA said:
traceimage said:
10 Aberdeen, in Northwood. Apparently it was a foreclosure that sold for $625k in May. It came back on the market yesterday at $779,990. It's been all renovated and looks pretty nice (although a little over the top for my taste). We were there for maybe 15 minutes, and we probably saw 5 different groups of people (all Asian) come to take a look at the house. While we were there, we overheard someone asking the owners (who were there) if they buy foreclosures and then flip them, and they said yes. So anyway, I just checked on Redfin, and the house is already in backup offers! I was kind of hoping the house wouldn't sell, because the flipper owners looked so smug and annoying, but it sold in a day! Unbelievable. Must be nice to earn $150k in a month...less renovation expenses, of course.
Click to expand...

I'll believe it when it actually closes. The way the Jumbo market has frozen with high rates and angelic supporting data, plus lets wait for the appraisal that has been killing deals left and right i think these flippers may be selling this home many times before they cut their losses and dump it at a loss...
Click to expand...
Yeah, it will be interesting if the appraisal totally disregards the previous sales amonut of $625k. Even if the flippers provide the appraisal with receipts of all the upgrades I'd bet it wouldn't come close to appraising for $780k.
 
usctrojanman29 said:
OCCOBRA said:
traceimage said:
10 Aberdeen, in Northwood. Apparently it was a foreclosure that sold for $625k in May. It came back on the market yesterday at $779,990. It's been all renovated and looks pretty nice (although a little over the top for my taste). We were there for maybe 15 minutes, and we probably saw 5 different groups of people (all Asian) come to take a look at the house. While we were there, we overheard someone asking the owners (who were there) if they buy foreclosures and then flip them, and they said yes. So anyway, I just checked on Redfin, and the house is already in backup offers! I was kind of hoping the house wouldn't sell, because the flipper owners looked so smug and annoying, but it sold in a day! Unbelievable. Must be nice to earn $150k in a month...less renovation expenses, of course.
Click to expand...

I'll believe it when it actually closes. The way the Jumbo market has frozen with high rates and angelic supporting data, plus lets wait for the appraisal that has been killing deals left and right i think these flippers may be selling this home many times before they cut their losses and dump it at a loss...
Click to expand...
Yeah, it will be interesting if the appraisal totally disregards the previous sales amonut of $625k. Even if the flippers provide the appraisal with receipts of all the upgrades I'd bet it wouldn't come close to appraising for $780k.
Click to expand...

That's a good point. If appraisals are really by the book, it would be impossible to make money flipping houses, unless they start with a house that was underpriced for the condition in the first place (which is at least semi-likely with an all-cash auction purchase, I suppose). That is, the appraisal should show the house to only be worth what they paid for it plus the amount of money they spent fixing it up, with no profit, other than possibly an hourly rate for their labor if they really did do the grunt work themselves as opposed to hiring somebody to do it. Of course, even then, there are transaction costs which need to be subtracted.
 
Geotpf said:
usctrojanman29 said:
OCCOBRA said:
traceimage said:
10 Aberdeen, in Northwood. Apparently it was a foreclosure that sold for $625k in May. It came back on the market yesterday at $779,990. It's been all renovated and looks pretty nice (although a little over the top for my taste). We were there for maybe 15 minutes, and we probably saw 5 different groups of people (all Asian) come to take a look at the house. While we were there, we overheard someone asking the owners (who were there) if they buy foreclosures and then flip them, and they said yes. So anyway, I just checked on Redfin, and the house is already in backup offers! I was kind of hoping the house wouldn't sell, because the flipper owners looked so smug and annoying, but it sold in a day! Unbelievable. Must be nice to earn $150k in a month...less renovation expenses, of course.
Click to expand...

I'll believe it when it actually closes. The way the Jumbo market has frozen with high rates and angelic supporting data, plus lets wait for the appraisal that has been killing deals left and right i think these flippers may be selling this home many times before they cut their losses and dump it at a loss...
Click to expand...
Yeah, it will be interesting if the appraisal totally disregards the previous sales amonut of $625k. Even if the flippers provide the appraisal with receipts of all the upgrades I'd bet it wouldn't come close to appraising for $780k.
Click to expand...

That's a good point. If appraisals are really by the book, it would be impossible to make money flipping houses, unless they start with a house that was underpriced for the condition in the first place (which is at least semi-likely with an all-cash auction purchase, I suppose). That is, the appraisal should show the house to only be worth what they paid for it plus the amount of money they spent fixing it up, with no profit, other than possibly an hourly rate for their labor if they really did do the grunt work themselves as opposed to hiring somebody to do it. Of course, even then, there are transaction costs which need to be subtracted.
Click to expand...

What these considerations matter if the buyer brings 50%+ down to the purchase?
 
JVNA said:
Geotpf said:
usctrojanman29 said:
OCCOBRA said:
traceimage said:
10 Aberdeen, in Northwood. Apparently it was a foreclosure that sold for $625k in May. It came back on the market yesterday at $779,990. It's been all renovated and looks pretty nice (although a little over the top for my taste). We were there for maybe 15 minutes, and we probably saw 5 different groups of people (all Asian) come to take a look at the house. While we were there, we overheard someone asking the owners (who were there) if they buy foreclosures and then flip them, and they said yes. So anyway, I just checked on Redfin, and the house is already in backup offers! I was kind of hoping the house wouldn't sell, because the flipper owners looked so smug and annoying, but it sold in a day! Unbelievable. Must be nice to earn $150k in a month...less renovation expenses, of course.
Click to expand...

I'll believe it when it actually closes. The way the Jumbo market has frozen with high rates and angelic supporting data, plus lets wait for the appraisal that has been killing deals left and right i think these flippers may be selling this home many times before they cut their losses and dump it at a loss...
Click to expand...
Yeah, it will be interesting if the appraisal totally disregards the previous sales amonut of $625k. Even if the flippers provide the appraisal with receipts of all the upgrades I'd bet it wouldn't come close to appraising for $780k.
Click to expand...

That's a good point. If appraisals are really by the book, it would be impossible to make money flipping houses, unless they start with a house that was underpriced for the condition in the first place (which is at least semi-likely with an all-cash auction purchase, I suppose). That is, the appraisal should show the house to only be worth what they paid for it plus the amount of money they spent fixing it up, with no profit, other than possibly an hourly rate for their labor if they really did do the grunt work themselves as opposed to hiring somebody to do it. Of course, even then, there are transaction costs which need to be subtracted.
Click to expand...

What these considerations matter if the buyer brings 50%+ down to the purchase?
Click to expand...
ZERO! It only matters if someone is putting down 20-25% down and the appraisal lowers the loan amount.
 
usctrojanman29 said:
JVNA said:
Geotpf said:
usctrojanman29 said:
OCCOBRA said:
traceimage said:
10 Aberdeen, in Northwood. Apparently it was a foreclosure that sold for $625k in May. It came back on the market yesterday at $779,990. It's been all renovated and looks pretty nice (although a little over the top for my taste). We were there for maybe 15 minutes, and we probably saw 5 different groups of people (all Asian) come to take a look at the house. While we were there, we overheard someone asking the owners (who were there) if they buy foreclosures and then flip them, and they said yes. So anyway, I just checked on Redfin, and the house is already in backup offers! I was kind of hoping the house wouldn't sell, because the flipper owners looked so smug and annoying, but it sold in a day! Unbelievable. Must be nice to earn $150k in a month...less renovation expenses, of course.
Click to expand...

I'll believe it when it actually closes. The way the Jumbo market has frozen with high rates and angelic supporting data, plus lets wait for the appraisal that has been killing deals left and right i think these flippers may be selling this home many times before they cut their losses and dump it at a loss...
Click to expand...
Yeah, it will be interesting if the appraisal totally disregards the previous sales amonut of $625k. Even if the flippers provide the appraisal with receipts of all the upgrades I'd bet it wouldn't come close to appraising for $780k.
Click to expand...

That's a good point. If appraisals are really by the book, it would be impossible to make money flipping houses, unless they start with a house that was underpriced for the condition in the first place (which is at least semi-likely with an all-cash auction purchase, I suppose). That is, the appraisal should show the house to only be worth what they paid for it plus the amount of money they spent fixing it up, with no profit, other than possibly an hourly rate for their labor if they really did do the grunt work themselves as opposed to hiring somebody to do it. Of course, even then, there are transaction costs which need to be subtracted.
Click to expand...

What these considerations matter if the buyer brings 50%+ down to the purchase?
Click to expand...
ZERO! It only matters if someone is putting down 20-25% down and the appraisal lowers the loan amount.
Click to expand...

It will have to be a super high down payment for it to work. Say the appraisal come in at $650 that is the max the lender will lend the buyer will have to make up the difference in cash of another 130k and on top of that is the 20% down on the $650 ($130K)first so a total of about 260,000 will be need at close of escrow plus closing costs which could add another 20k easy on top of that amount. So for this deal to work a minimum of 40 to 45% in cash of the high $780 k price would be needed. When i finish out a tract of homes and sell the models we would run into these problem of low appraisal value all the time. I warn the buyers upfront of the potential and most would buy anyhow since they are getting a new model home with all the whistles and bells. For this property any potential buyer that finds out the appraisal did not come in at value and to be told the need to make up the difference will probably tell these flippers to go pound sand and buy something else.
 
I think what you guys forget is that this will not be a jumbo mortgage. If they put down 20% or 30% the amount financed is below the $725K limit so the buyer will get a rate of around 5 3/4 with no points. I'm not saying this house is worth what it sold for but getting financing wont be a problem. I have to laugh though all of the pictures and none show the front of the house. I just bought a house and when I looked on Realtor.com or any other site if they didn't show the front of the house I refused to go to the house. They are telling you the front is not too appealing. I happen to think the low end Irvine housing market is close to the bottom but the high end still has 20% or so to fall. The option Arms are coming.
 
hbguybill said:
I think what you guys forget is that this will not be a jumbo mortgage. If they put down 20% or 30% the amount financed is below the $725K limit so the buyer will get a rate of around 5 3/4 with no points. I'm not saying this house is worth what it sold for but getting financing wont be a problem. I have to laugh though all of the pictures and none show the front of the house. I just bought a house and when I looked on Realtor.com or any other site if they didn't show the front of the house I refused to go to the house. They are telling you the front is not too appealing. I happen to think the low end Irvine housing market is close to the bottom but the high end still has 20% or so to fall. The option Arms are coming.
Click to expand...

Just look at Google street view (linked directly at places like Redfin from the listing) to see the front of the house if they don't have a picture of it. I like listings with lousy pictures-less competition from people like you. Usually, if the pictures suck, it's the agent's fault, not the house's.
 
Geo,

I'm sorry but in this case you are completely wrong. The pictures that are posted on this listing were done by a really good Realtor. After seeing the front of the house on Google it is not what I would consider an $800,000 house. It screams out 1970's Irvine. The Realtor was smart. He listed the best part of the house (The inside and the back yard). Those are the parts of the house that were updated and showed well. A bad realtor regardless of how unappealing the front of the house is will always show the front of the house in the first picture. This guy was a pro. He got the buying party interested in the house without seeing the front and they were sold. When the front of the house is not listed in any of the pictures it is a calculated move by the Realtor. No Realtor would forget to list the front of the house. Ask any good Realtor and they will agree.
 
hbguybill said:
Geo,

I'm sorry but in this case you are completely wrong. The pictures that are posted on this listing were done by a really good Realtor. After seeing the front of the house on Google it is not what I would consider an $800,000 house. It screams out 1970's Irvine. The Realtor was smart. He listed the best part of the house (The inside and the back yard). Those are the parts of the house that were updated and showed well. A bad realtor regardless of how unappealing the front of the house is will always show the front of the house in the first picture. This guy was a pro. He got the buying party interested in the house without seeing the front and they were sold. When the front of the house is not listed in any of the pictures it is a calculated move by the Realtor. No Realtor would forget to list the front of the house. Ask any good Realtor and they will agree.
Click to expand...
You are exactly right, a good realtor will have potential buyers focus on the positive aspects of a property. The top 3 things that buyers are interesting in is 1) Location 2) Good floorplan and 3) Price. The first two you can't really change but the third thing being negotiable.
 
So in case anyone wants to know, I checked Redfin and this house sold for $785k, about $5k over asking price. So the flippers made $160k, less renovation expenses, in 2 months.
 
21 Del Mar

Foot traffic was VERY heavy, I drag the family half an hour before the close, short-sale; already have 7 offers; right on the corner, no yard what-so-ever; the other houses at least have some grass in front or back; the patio is virtually non-existence, and the lot is tiny. Go there to see who is the current Irvine buyers, mainly families with two or more kids under 5; but an investor here and there, they usually, come alone, walk fast, and do not ask any questions...
 
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