Flip This House #4

Parent Cafe
1

I can’t believe I’m starting the next thread so quickly. But, if I don’t start documenting the search, I’ll forget some along the way. I started searching diligently last week, although it’s awfully hard to be aggressive without any proof of funds. It’s like “Oh, I want to buy that car from you at a really low price, but I won’t have any money until next week. Will you hold it for me?”

Property #1
I made an offer last year directly to a ‘wholesaler’ and now I am on his email list. He’s got a North Park property he’s selling and he sent it out to his list. I’m sure he got a lot of responses because it is on a really hot street near Balboa Park. But, for some reason he put it on the MLS about 4 days later. I think I explained in another post that it was swarmed by big boy investors during the 2 hr open house window he had and I just didn’t even bother after my visit. He couldn’t even give me the time of day because he was busy schmoozing all the guys. It really was a horrible cave and it had lost all of the original charm through the years.

Then it went pending and I think he had an offer that was about $50,000 over his original ‘secret email’ price. But, it just came back on the market again and his offer fell through. I contacted him and he got right back to me, but he’s still bluffing his way around at a ridiculous high price - I did not bother writing an offer. The house would just take way too much work and I’m going to be a little more careful this time.

PS - If you would like an explanation of ‘wholesaler’ I would be happy to explain

Property #2
Went through another property that is located in an area called Bay Park which is east of I5 right at Mission Bay. It was a hilarious mish mash of homeowner illegal additions, fallout shelters underground, sheds, garage conversions, you name it. The house was such a dark confusing mess that the agent had drawn a picture of the rooms and put it on the counter so people could figure it out. The bottom line is that it has a lot of square feet for the neighborhood, but it’s all laid out really weird. Decided to pass on that one.

Property #3
Another house in Bay Park area, in terrible terrible dirty hoarding condition. This one is a Hail Mary by a real estate agent because the house is about to go up for foreclosure auction. I took advantage of the opportunity to get inside and check it out, just in case I am going to bid on it at auction. I’m sure many other investors were thinking the same thing. In reality, the homeowners will make more money if it goes to auction because any amount over their mortgage gets refunded straight back to them. No need to be paying 5% to a real estate agent to get in the middle of it. There are many scenarios where it works out better for a homeowner to go to foreclosure.

But, I just checked and someone made an offer and went into contract within 1 day. Maybe I missed something somewhere that this house could be worth a lot of money fixed up.

2

Love being in at the start. Somehow, I missed the beginning of those other threads! I think!

3

Happy to follow you on this next journey, cb!

4

Me, too.

5

Yesss!!! :slight_smile:

6

Sounds interesting so far CB. We had a couple friends that lived in Bay Park, but they have all moved to other places. Can’t wait to see what’s next for you :slight_smile:

7

Property #4

is a very interesting property. Mid Century Modern (very hot here) built by a well known local architect. I was all over this one - I really wanted to like it. I called the listing agent and introduced myself and then went over to the property with my carpenter to crawl around.

He just didn’t ‘get it’, he couldn’t understand why anyone would want this weird house built on stilts with serious serious termite damage. Very dark inside from the gumwood paneling. Unfortunately, he was smart enough to start checking the major floor joists holding up the house. They are almost 30 feet long and come out of the hill under the house and over two concrete block pillars holding the whole thing up. I’m sure it was a very futuristic design in it’s day. Unfortunately the prior owner did not maintain the house and never took care of termite damage. The railings and deck planks on the big deck are rotted away and the entire deck has to be replaced. The termites got through the deck planks and are eating into the top of about 50% of the main floor joists. Noone is going to know this until they start ripping off the deck planks. He figured it out by feeling around from the top of a ladder.

Met with the listing agent and she was very encouraging. She even called me the next day to follow up on whether I wanted to make an offer. But, she had a bunch of offers at top listing price and the numbers just did not crunch

I’m going to put the address out here because it is a very interesting house which I am going to follow

3344 Poe Street, San Diego, CA 92106

8

Wow. Vintage chain link fence! I looked at the pictures of Poe St. on Trulia and it’s neat and has an ocean view. I think you are wise to avoid the potential foundation problems this house may have. Don Draper could move right in though.

9

cb, thank you for including us in your quest. I find your posts fascinating!

10

Thrilled to be following Flip 4. I found listings for the Poe house that show some original B&W photos of the house - very interesting. There was a lot less development in the area 60 years ago!

11

Excited for the next round! Thanks, CB, for continuing to share your journey with us.

12

Marilyn, I saw those vintage pics, too. Cb, your carpenter is an astute guy!

13

Oh man, you could make a killing on that place! Even with the termite problems. Ultra desirable! If I were in the market for a house in SD, I’d buy it in a minute. It could be SPECTACULAR. What do you think the reno costs would be, including the foundation and termite issues?

14

That is one gorgeous home, and the B&W historic photos are so cool. Too bad it needs so much work.

15

fun home. Too bad about the termites.

16

cb, it’s great your guy figured out a major issue before you wanted it so much you couldn’t walk away. A fellow like that is worth his weight in gold.

Keep looking. As my mother used to say, “So, maybe he has a friend!” That listing agent might get in touch with you about another property.

17

CB - Love the old pictures of the house! Don Draper could move right into it. I’m guessing that the termite damage would add major dollars to a renovation budget for the house.

18

Regarding the Mid Century Modern Home, there were some very expensive issues with that home:

  1. Major termite damage to the floor joists that were holding up the house
  2. Entire deck needs to be rebuilt around house and upstairs off 2nd floor addition
  3. There is a 8 foot high concrete block retaining wall at back of property between neighbor house. This wall is basically holding up the neighbor’s lot with backfill about 6 ft behind the retaining wall. It is falling down and would take at least $10k to build a new wall (not to mention permits and engineering!!)
  4. No flat yard area except little bit to side of house
  5. Stairs inside house are in front of kitchen, between kitchen and living room, no way to open up kitchen because of stairs in the way, it would be a real structural challenge to get a slightly ‘open concept’
  6. Some traffic noise from main street at bottom of canyon off house
  7. Some airplane noise
  8. Possibility that house needs to be re-wired and new plumbing (couldn’t see it during inspection)

The views are not outstanding, small little peek view to Mission Bay and the view to San Diego Harbor to the left is only from the balcony off 2nd story master bedroom. Plus, I’m not really sure what to do with all that wood inside… leave it alone??? Clean and oil it? What do I do with the strange ‘built in’ couch thing in the living room? The whole project would become a struggle between what to retain as ‘original period’ and what needs to be changed in order to make the house modern and functional.

Next… I just cannot see any way that this house will sell for more than $950,000. That is what the comparables are telling me. I realize that there is subjective value with the architecture, but I just couldn’t figure out how there could be a million price tag on the house - especially if a Buyer needs to get a bank appraisal. So, to be conservative I had to use $950,000 as future sale price. I cannot pay $850,000 for a house that needs a ton of expensive work and might sell for $950k when finished. But, that is the range of offers that she was getting.

19

In today’s market you will see plenty of houses priced that way as you described as above. Flipping became very difficult in the past year and you will have difficulty to replace a house like flipping # 3.

20

Okay, if views are not outstanding, that totally changes my impression of the property. My enthusiasm was based in large part on my (false) impression from the pictures that there were sweeping sit-down ocean views.